OMV AG and Abu Dhabi Nationwide Oil Co. PJSC (ADNOC) on Tuesday signed an settlement to consolidate their polyolefin companies, with ADNOC additionally agreeing to accumulate NOVA Chemical compounds Corp. to be transferred to the brand new three way partnership (JV).
Borealis AG and Borouge PLC will merge to type Borouge Group Worldwide. Austria’s state-backed built-in power firm OMV owns 75 % of Vienna-based Borealis whereas ADNOC holds the remaining 25 %. In Abu Dhabi-based Borouge, ADNOC owns 54 % and Borealis 36 % whereas the remaining 10 % is on free float.
The brand new JV will function a platform for acquisitions by ADNOC and OMV within the polyolefins sector. “Demand in polyolefins is predicted to develop globally at a CAGR of three.7 % between 2024-2035”, a joint assertion stated citing knowledge from Chemical Market Analytics. “That is being pushed by increased demand development areas and megatrends together with inhabitants development, healthcare and hygiene demand, supplies wanted for the power transition, meals waste and shortage, in addition to water entry and sanitation”.
- Advertisement -
The primary of those acquisitions can be NOVA Chemical compounds from Nova Chemical compounds Holdings GmbH, a subsidiary of the Abu Dhabi government-owned Mubadala Funding Co. PJSC. ADNOC signed a cope with Nova Chemical compounds Holdings for the $13.4 billion buy, to be funded with debt.
The acquisition would make the deliberate JV the world’s fourth-biggest polyolefins firm, the assertion stated. NOVA Chemical compounds says it produces about 8 billion kilos of ethylene a yr in Canada and the USA.
Borouge Group Worldwide “brings collectively three extremely complementary regional leaders with greater than 11,000 staff, a proforma polyolefins capability of 12.2 million tonnes p.a. [per annum] and olefin capability of 11.4 million tonnes p.a.”, the assertion stated. “Borouge Group Worldwide shall be geographically properly balanced, with established management positions in key markets and entry to enticing and excessive development areas, together with the Americas, Europe, Asia, and the Center East”.
ADNOC and OMV anticipate to finish the Borealis-Borouge mixture and the NOVA Chemical compounds acquisition within the first quarter of 2026 topic to regulatory approvals and different customary circumstances.
OMV is predicted to take a position EUR 1.608 billion ($1.69 billion) in Borouge Group Worldwide. The dedication can be diminished by the quantity of dividends paid till merger closure.
ADNOC and OMV would every personal 46.94 % of the JV. The remaining 6.12 % is to be held by public float on the Abu Dhabi trade, with plans for later itemizing on the Vienna bourse.
ADNOC holds the precise to nominate the chair of Borouge Group Worldwide’s supervisory board, whereas the chief board shall be unanimously shaped. The JV shall be based mostly within the Austrian capital.
“These transformative transactions mark a pivotal milestone in ADNOC’s world chemical compounds technique as we ship on our worldwide development mandate”, commented ADNOC managing director and chief govt Sultan Ahmed Al Jaber. “Constructing on our 25-year strategic partnership with OMV, we are going to create a brand new business powerhouse, with a portfolio of premium merchandise, cutting-edge applied sciences and worldwide market entry.
“The visionary mixture of Borouge and Borealis and acquisition of Nova Chemical compounds, additional future-proofs ADNOC and solidifies Abu Dhabi’s standing as a frontrunner within the chemical compounds sector, as we search to satisfy the rising world demand for chemical compounds and related merchandise, whereas driving worth creation and development alternatives for our shareholders”.
In the meantime ADNOC is within the strategy of finishing its takeover of German chemical compounds producer Covestro AG with a share acquisition provide of about EUR 11.7 billion. ADNOC by way of its newly created funding platform XRG has to this point purchased round 91.32 % of Covestro’s excellent shares, exceeding the acceptance threshold for the acquisition, XRG stated December 19, 2024. The takeover is predicted to conclude within the second half of 2025.
OMV chief govt Alfred Stern stated, “These landmark transactions… will speed up our development technique in Chemical compounds and assist OMV’s transformation into an built-in sustainable chemical compounds, fuels, and power firm”.
The ADNOC-OMV JV is predicted to generate over $7 billion each year of through-the-cycle earnings earlier than curiosity, taxes, depreciation and amortization, ADNOC stated.
“Supported by this stronger money circulation technology, the Firm’s dividend coverage shall be based mostly on a 90 % payout ratio with potential upside for distribution based mostly on free money circulation technology, with the target of sustaining a minimal annual payout of 16.2 fils per share, representing a minimal 2 % accretion vs. Borouge’s focused full yr 2024 DPS [dividend per share]”, ADNOC stated in an earlier assertion.
ADNOC plans to switch its stake within the JV to XRG. XRG, introduced November 27, 2024, with an enterprise worth of greater than $80 billion, goals to develop the United Arab Emirates’ share of the worldwide chemical, low-carbon power and pure gasoline markets. XRG would additionally handle Covestro.
To contact the writer, e mail jov.onsat@rigzone.com
