ADNOC is Underway to Ink a Deal with OMV for their Petrochemical Joint Venture

Abu Dhabi National Oil Co (ADNOC) is reportedly nearing an agreement with Austrian energy company OMV to combine their petrochemical operations, according to sources familiar with the discussions. These talks, initiated in July 2023, aim to merge ADNOC's Borouge, listed on the Abu Dhabi Securities Exchange, with OMV's Vienna-based Borealis, potentially forming a new chemical entity valued over $30 billion. OMV currently holds a 75% stake in Borealis, known for its polyolefins solutions and recycling initiatives, while ADNOC owns the remaining 25%.

Borouge, a petrochemical company, is a joint venture between ADNOC, holding a 54% share, and Borealis, with a 36% stake. OMV previously indicated that Borealis and Borouge would likely become "equal partners in a jointly controlled, listed platform," aimed at fostering a global polyolefin company through potential growth acquisitions.

The combined entity is projected to generate annual sales exceeding $20 billion. OMV's chairman and CEO, Alfred Stern, highlighted the strong industrial logic behind this move, noting that it would unite Borealis' technological prowess and specialty in sustainable polyolefins with Borouge's cost advantages and market access, thereby creating a leading global polyolefin company with substantial growth potential.

In a related development, Bloomberg News last month reported ADNOC's interest in acquiring European energy firm Wintershall Dea, as part of its strategy to expand its international footprint. This acquisition, potentially valuing Wintershall Dea at over €10 billion ($11 billion), aligns with ADNOC's growth objectives. German chemical giant BASF, holding a 73% stake in Wintershall Dea, is reportedly consulting advisers on the possible sale of this oil and gas company.

According to the article by Procurement Resource, Abu Dhabi National Oil Co (ADNOC) is close to merging its Borouge business with OMV's Borealis, creating a $30 billion petrochemical giant. This aligns with ADNOC's strategy to expand globally, including its potential acquisition of Wintershall Dea, valued at over €10 billion, to bolster its international presence.