On December 14, according to multiple foreign media reports, people familiar with the matter said that Austrian Oil and Gas Company (OMV) and Abu Dhabi National Oil Company (ADNOC) are preparing to announce the merger of two companies in which they hold shares, namely the merger of Borealis. and Borouge to establish a new billion-dollar petrochemical holding entity.
The person said the framework agreement to be announced will include a capital injection to ensure both parties have equal equity stakes in the new company.
The new billion-level petrochemical giant
According to a previous report by Bloomberg, the possible valuation of Borealis (including its stake in Borouge) by both parties is approximately US$10 billion. The total valuation of the combined entity may exceed US$30 billion, or approximately RMB 216.6 billion (including potential synergies).
Currently, OMV holds 75% of Borealis shares, while Adnoc holds the remaining 25%. At the same time, Adnoc holds 54% of Borouge, Borealis holds 36%, and the remaining shares are publicly listed. OMV itself is majority-owned by the Austrian government, with Adnoc holding a 24.9% stake.
It is reported that the new company after the merger will become a global heavyweight with annual sales exceeding US$20 billion. By then, Adnoc and OMV will each hold 47% of the combined entity. This will make 6% of the shares free float.
OMV CEO Alfred Stern believes the deal has “strong and compelling industrial logic.”
Additionally, OMV shares soared after Reuters reported that the two parties were close to a merger agreement, last rising 3.6%.
Polyolefin giant continues to expand
Previously, OMV said Borealis and Borouge would become “equal partners under a jointly controlled listing platform to realize potential growth acquisitions, thereby creating a global polyolefins company”.
Recently, the global polyolefin giant Borealis has also made frequent moves to continue to expand its polyolefin industry territory:
On November 29, Borealis announced the signing of an agreement to acquire 100% of the shares of Integra Plastics AD, an advanced machinery recycling company located in Bulgaria. The acquisition will strengthen Borealis’ advanced machinery recycling portfolio, adding more than 20,000 tonnes of recycling capacity and supporting growing customer demand for sustainable solutions.
On November 2, Borealis announced the completion of the acquisition of Rialti S.p.A., an Italian polypropylene blending and recycling company, expanding the company’s polypropylene blending business, especially the addition of 50,000 tons/year polypropylene based on mechanical recycled materials. Propylene blend yield.
On October 3, the polyethylene (PE) unit of Baystar, a joint venture between Borealis and Total Energy, was put into operation. The new unit, worth US$1.4 billion, has a production capacity of 625,000 tons per year, increasing the total output of the Baystar base to More than 1 million tons per year. The unit uses Borealis’ most advanced patented technology to provide advanced high value-added polymers for the energy, infrastructure and consumer goods industries, enhancing sustainability by reducing weight and incorporating more recycled materials into various end products. sex.
Abu Dhabi National Oil Company (ADNOC):
Founded in 1971, it is one of the world’s leading energy producers and a major catalyst for Abu Dhabi’s economic growth and diversification. With a production capacity of more than 4 million barrels per day of oil and approximately 11 billion cubic feet of natural gas, it operates across the entire hydrocarbon value chain. It has a fully integrated business network of exploration, production, storage, refining and trading, as well as extensive petrochemical product development.
Austrian Energy Company (OMV):
An integrated energy company with extensive experience and global influence in the oil and gas field, it is mainly engaged in oil and gas exploration, production, refining and sales. It is one of the largest listed energy companies in the Middle East and Central Europe, and its business scope covers petroleum and all aspects of the natural gas value chain, with an extensive global market network.
Borealis:
The world’s eighth largest producer of polyethylene and polypropylene and a major European producer of polyolefins and basic chemicals. It focuses on developing piping systems, energy and communication cables, automotive and advanced packaging markets and has a strong presence in Europe. Growing through Borouge in the Middle East and Asia Pacific. Total revenue in 2022 is approximately 12.2 billion euros, with a net profit of 2.1 billion euros.
Borouge:
A leading global supplier of innovative and differentiated polyolefin solutions for energy, infrastructure, automotive, advanced packaging, medical and agriculture, with 2022 revenue of $6.7 billion and full-year Adjusted EBITDA of $2.6 billion.
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