Adnoc and OMV Combine Forces to Create Petrochemicals Giant

Adnoc and OMV, two leading energy companies, have announced a strategic merger to create a petrochemicals giant, Borouge Group International. The new entity will be formed by combining Adnoc's Borouge and OMV's Borealis, with Adnoc acquiring Nova Chemicals from Mubadala Investment Company. This merger is set to create the world's fourth-largest producer of polyolefins, with a significant presence in North America.



The merger is expected to generate substantial synergies, with a run-rate EBITDA synergy potential of approximately USD 500 million per annum. This will be realized at a rate of 75% during the first three years after closing. The new entity is also expected to create significant value, free cash flow, and be clean CCS EPS accretive for OMV. Additionally, Borouge Group International will have a minimum total annual floor dividend of USD 2.2 billion, with an annual floor dividend of around USD 1 billion to OMV.



The strategic location of the new entity's headquarters in Austria and regional headquarters in Abu Dhabi will provide Borouge Group International with global reach and market access. This will enable the company to serve customers in various regions more efficiently, reducing lead times and enhancing customer service. Moreover, having a presence in both Europe and the Middle East will allow the company to better understand and respond to regional market trends and demands.

The acquisition of Nova Chemicals will further strengthen Borouge Group International's presence across the Americas, increasing its exposure to advantaged feedstock and supporting its financial performance. The combined entity will be uniquely positioned to create value and generate superior through-cycle shareholder returns, supported by synergies and a strong pipeline of organic growth projects.

Alfred Stern, Chairman of the Executive Board and Chief Executive Officer of OMV, stated, "These landmark transactions represent a momentous step for OMV. They will accelerate our growth strategy in Chemicals and support OMV’s transformation into an integrated sustainable chemicals, fuels, and energy company. Together with Adnoc, our strategic partner of 25 years, we are creating a global polyolefins leader, exceptionally positioned for value creation by accessing the largest and most cost-advantaged markets."

His Excellency Dr. Sultan Ahmed Al Jaber, Adnoc Managing Director and Group CEO, added, "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."

In conclusion, the merger between Adnoc and OMV to create Borouge Group International is a strategic move that will significantly impact the global polyolefins market. The new entity will have a strong market position, expanded market access, enhanced competitiveness, a diverse product portfolio, and a commitment to innovation and sustainability. This merger is expected to generate significant synergies and contribute to the new entity's financial performance, while also supporting organic growth and access to attractive markets.