Sector News

Adnoc and OMV weigh options to create $30bn company

July 7, 2023
Energy & Chemical Value Chain

Abu Dhabi National Oil Company (Adnoc) and Austrian energy company OMV are weighing options to merge Borouge and Borealis to create a chemicals and plastics entity worth more than $30bn (Dh110bn), reported Bloomberg, citing sources.

Borealis, which has its headquarters in Vienna, is 75% owned by OMV and the remaining 25% by Adnoc.

Meanwhile, Borouge, which has a market value of roughly $22bn, is a joint venture between Adnoc and Borealis and is listed in Abu Dhabi.

According to the sources, the owners are debating the potential value and ownership structure of a merged company and may agree on the basic parameters for formal merger talks in the upcoming weeks.

The talks have been intermittent for several months and could still be delayed or stopped, the sources added.

Borealis, with its investment in Borouge, may be valued at around $10bn by the two parties, the sources said, adding that the merged company may be valued at more than $30bn after potential advantages are factored in.

They noted that the two fundamental obstacles to any agreement are still the specific value and ownership structure, which could change.

Adnoc and OMV representatives refused to comment. Borealis and Borouge representatives directed inquiries to the businesses’ owners.

As per the report, combining the businesses would provide Adnoc and OMV with the scale they need to compete, streamline the ownership structure and offer them greater freedom to spend and grow in Asia, where demand for chemicals and plastics is on the rise.

However, given that there are several parties involved, including governments, a final deal may not be reached.


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