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Borealis and Borouge merge: a new chemical giant is created!
Borealis and Borouge merge to form Borouge Group International. OMV and Adnoc are investing for growth in the polyolefin sector.
Borealis and Borouge merge: a new chemical giant is created!
The planned merger of Borealis and Borouge is taking concrete shape. How finance.net reported that the two companies are close to forming a joint venture, subject to final legal steps. Borealis, which is 75% owned by OMV, and Borouge, which is 54% owned by the state-owned Adnoc from Abu Dhabi, want to work together under the new name Borouge Group International. OMV and Adnoc will each hold almost 47% of the shares in the new company.
A central element of the merger is the planned acquisition of Nova Chemicals for around 9 billion euros. OMV plans to invest 1.6 billion euros in the joint venture. Borealis is known as a polyolefin solutions provider and has a strong focus on recycling. The products range from hoses and packaging to films and housings for household and electronic devices.
Agreement details
In addition, the key commercial terms for the combination of the polyolefins businesses of OMV and ADNOC have been set out, such as omv.com communicates. The new company, which will also be called Borouge Group International, will serve as a platform for potential growth acquisitions in the polyolefins sector. OMV and ADNOC will be equal shareholders with joint control of the joint venture company.
The acquisition of NOVA Chemicals comes via a $9.377 billion purchase agreement entered into between Mubadala and ADNOC. OMV is planning a capital increase of 1.608 billion euros to finance the new company. Other structures include that Adnoc has the right to appoint the chairman of the supervisory board, while the board of directors is elected unanimously. The new company is also expected to be listed on the Abu Dhabi Securities Exchange and the Vienna Stock Exchange.
The acquisition is being prepared with bridge financing, which will later be refinanced through a capital increase, without the direct involvement of OMV or ADNOC. Additionally, OMV's existing dividend policy will remain unchanged until the transaction is completed, with a review after 2025.