ABU DHABI: ADNOC (Abu Dhabi National Oil Company) and Austria’s OMV have announced their intention to merge their respective shareholdings in Borouge plc and Borealis AG, culminating in the establishment of Borouge Group International.
The strategic merger is poised to reshape the landscape of the chemicals market, particularly in the production of polyolefins, a category of versatile materials utilised extensively across various sectors, including packaging, textiles, and medical supplies.
The newly formed Borouge Group International will not only consolidate the strengths of Borouge and Borealis but will also include the acquisition of NOVA Chemicals Corporation for a substantial AED49.2 billion.
The acquisition is expected to enhance the company’s operational capabilities and market reach, further solidifying its position as a formidable player in the global chemicals arena. With the integration of Borouge 4, the group is projected to achieve a valuation exceeding AED220 billion, thereby becoming the world’s fourth-largest producer of polyolefins.
The governance structure of Borouge Group International will reflect the collaborative nature of this venture, with joint ownership and control retained by ADNOC and OMV. The headquarters will be strategically located in both Vienna and Abu Dhabi, symbolising the merging of European and Middle Eastern expertise in the chemicals sector.
Notably, OMV’s commitment to inject €1.6 billion (approximately AED6.1 billion) into the consolidated entity underscores the importance of equalising shareholdings and fostering a balanced partnership.
Financial infusion
The financial infusion is anticipated to enhance operational efficiency, yielding an estimated AED1.8 billion in annual synergies, which will ultimately benefit shareholders through consistent dividend growth.
Dr. Sultan Ahmed Al Jaber, ADNOC’s Managing Director and Group CEO, said the transformative nature of this merger, emphasising its alignment with ADNOC’s global chemicals strategy and the overarching goal of international growth as directed by UAE leadership.
“The strategic partnership, which has flourished over the past 25 years, is set to create an industry powerhouse characterized by a portfolio of premium products and cutting-edge technologies. This merger not only positions ADNOC and OMV to meet the escalating global demand for chemicals but also enhances Abu Dhabi’s reputation as a leader in the sector.”
Maximising energy spectrum
The synergies arising from the merger will be manifold, as Borouge Group International will leverage the complementary strengths of its three constituent companies—Borouge, Borealis, and NOVA.
Each entity brings unique capabilities to the table, including competitive access to feedstocks, advanced technologies, and a commitment to sustainability through recyclable product lines.
The anticipated Borouge 4 expansion, expected to be integrated into the new company by 2026 at a projected cost of AED27.5 billion, is set to significantly bolster production capacity, ultimately yielding 13.6 million tonnes per annum across Europe, the Middle East, and North America.
Moreover, the agreement fortifies the longstanding collaboration between ADNOC and OMV, with ADNOC’s stake in the newly formed Borouge Group International transitioning to XRG, ADNOC’s international energy investment company.
Launched in 2024 with an enterprise value exceeding $80 billion, XRG represents a strategic initiative value across the energy spectrum, encompassing gas, chemicals, low-carbon fuels, and energy infrastructure.
