The EU competition authority approves the sale of the Borealis-Fertilizer division to the Czech Agrofert group of the Czech billionaire and ex-Prime Minister Andrej Babis without conditions. This was announced by the EU Commission this afternoon. The OMV subsidiary Borealis had implemented the sale of the business unit, which includes fertilizers, melamine and technical nitrogen, last year – and not only made friends with it.
Fourth in the industry, Agrofert has doubled its fertilizer production by taking over the fertilizer business of the OMV subsidiary Borealis (number three in Europe). The number of employees in this division increases from 3,200 to more than 5,000. With a production of eight million tons per year, it is number 2 in Europe after the Norwegian manufacturer Yara with 14 million tons per year, according to Agrofert.
While the EU Commission kept its examination period relatively short at around two months and announced a decision for March 13 from the start, the French authorities have been examining since autumn – without a time limit. There proceedings are under way under the national investment protection law. In Austria, this law would not have offered a solution, Economics Minister Martin Kocher said last year.
At Agrofert, however, it is still assumed that the deal will be concluded “in the first quarter”.
The closing of the 810 million euro deal was originally expected for November 2022. If the EU competition authorities actually give the green light, the sale could take place in the first quarter of 2023, it said on Monday Borealis on APA request.
The OMV chemical subsidiary Borealis originally wanted to sell its fertilizer business to the Russian EuroChem for EUR 455 million in a second attempt to sell it, but the transaction fell through because of Western sanctions against Russia. A few months later, a new buyer was found in the Agrofert group. He was already considered an interested party when the fertilizer division with its headquarters in Linz was first on Borealis’ sales list. However, these ambitions were called off again. In Austria there is strong resistance to the current sale to the Czechs on the part of the agricultural sector. Above all, the Lower Austrian Farmers’ Association – which was in the state election campaign until January – railed against the loss of security of supply in Austria. However, it is difficult to argue against a buyer from another EU country. Agrofert has promised high investments for the location in Linz – and thus a security of the location. After the decision he reacted Lower Austria Farmers’ Association promptly: The merger will give the Agrofert group a monopoly-like position on the domestic fertilizer market. “We will monitor the fertilizer market closely and immediately report any inconsistencies to the competent Austrian federal competition authority.”
Borealis 75 percent belongs to OMV, 25 percent is held by the sovereign wealth fund Mubadala from Abu Dhabi. The company completed a turnaround program for its fertilizer business two years ago. Agrofert has production facilities in Germany, Slovakia and the Czech Republic and is owned by foundations whose beneficiary is former Czech prime minister and current opposition leader Andrej Babis.
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