Abu Dhabi National Oil Company (ADNOC) and OMV Aktiengesellschaft (OMV) have signed an agreement to consolidate their petrochemical subsidiaries, Borouge and Borealis, into a new entity valued at over $60bn.
This merger is set to create Borouge Group International, which is expected to become a major player in the global polyolefins industry.
In conjunction with this merger, ADNOC has entered into a share purchase agreement with Nova Chemicals Holdings GmbH, a subsidiary of Mubadala Investment Company to acquire Nova Chemicals.
Based in North America, Nova Chemicals is a producer of polyethylene. It will be acquired for a consideration of $13.4bn, including debt by Borouge Group International.
Borouge Group International will be headquartered in Austria, with regional offices in the UAE, Calgary, Pittsburgh, and Singapore. The company plans to list on the Abu Dhabi Securities Exchange (ADX), subject to regulatory approvals.
ADNOC and OMV will each hold a 46.94% stake in the new company, while 6.12% will remain available for public trading, pending shareholder approval.
ADNOC managing director and group CEO Sultan Ahmed Al Jaber said: “These transformative transactions mark a pivotal milestone in ADNOC’s global chemicals strategy as we deliver on our international growth mandate.
“Building on our 25-year strategic partnership with OMV, we will create a new industry powerhouse, with a portfolio of premium products, cutting-edge technologies and worldwide market access.”
The new entity will leverage the strengths of three leading polyolefin companies, providing competitive feedstock and premium products while accessing growth markets with advanced technologies. The combined production capacity is expected to reach approximately 13.6 million tons per annum.
Borouge Group International aims to raise up to $4bn in primary capital by 2026 for MSCI index inclusion and an investment-grade credit rating. OMV has committed €1.6bn in cash to the new entity.
According to the parties, Borouge Group International is projected to generate over $7bn in annual EBITDA through economic cycles.
The merger plan involves reintegrating the Borouge-4 project in the UAE. The polyolefins project is anticipated to be completed by the end of 2026, with an estimated cost of around $7.5bn.
OMV CEO and executive board chairman Alfred Stern said: “We aim to significantly increase the sales volumes of innovative polyolefin premium products and be at the forefront of renewable and circular economy solutions. Together, OMV and ADNOC will build on a versatile and future-proof product portfolio and pursue significant organic growth opportunities.
“Most importantly, today’s agreement secures material synergies and long-term sustainable value creation for OMV’s shareholders.”
The merger and acquisition are expected to conclude in Q1 2026, pending regulatory approvals and customary conditions.
