OMV and ADNOC want to negotiate a merger of the chemical business

OMV and Abu Dhabi are considering merging the two companies Borealis and Borouge. A merger could result in a group with a double-digit billion valuation. “The Executive Board of OMV has just decided to pursue negotiations with ADNOC about a potential cooperation in their polyolefin business,” OMV announced on Friday. “A possible transaction would have a strong and convincing industrial relevance,” said OMV CEO Alfred Stern.

With the ad hoc announcement, the partially state-owned company confirmed previously rumors that a possible merger of the two companies was being explored. The cooperation would include a possible merger of the Borealis and Borouge businesses under a jointly controlled, publicly traded platform, the statement said.

“The merger of the strongly complementary companies would combine Borealis and Borouge’s technological expertise and sustainable specialty polyolefin solutions, advantageous cost positions and access to large and attractive markets and create a company with significant potential for organic and inorganic growth,” explained OMV -Boss. However, there are “a number of transaction parameters that require mutual agreement during the negotiation”.

As the financial news agency “Bloomberg” recently reported with reference to insiders, a chemical and plastics group with a market value of more than USD 30 billion (EUR 27.5 billion) could result from a merger. Vienna-based Borealis is 75 percent owned by OMV, the rest is owned by the state-owned Abu Dhabi National Oil Co (ADNOC). Borouge, with a market value of $22 billion, is 54 percent owned by ADNOC and 36 percent by Borealis. The Company’s remaining interest is listed on the Abu Dhabi Securities Exchange (“ADX”).

Because of the rumored merger of Borealis and Borouge, the Greens contacted Finance Minister Magnus Brunner (ÖVP) via a parliamentary question on July 6th. “The Borealis deal with Abu Dhabi would massively weaken Austria’s position. Now, with OMV, we have the majority in Borealis and are at the helm. After the deal, Austria would sit at the side table and have nothing more to report,” explained the green business spokeswoman Elisabeth Götze the request in a broadcast. The state-owned holding company ÖBAG holds 31.5 percent of OMV.