ADNOC, OMV to create $60bn global polyolefins powerhouse

Photo: Reuters

ADNOC and OMV have announced a major deal to merge their shares in Borouge and Borealis, creating a new company called Borouge Group International. As part of this agreement, Borouge Group International will purchase Nova Chemicals Corporation, a North American polyethylene producer, for $13.4 billion, including its existing debt.

This merger will result in a powerful global polyolefins company valued at $60 billion. The new company will become the fourth-largest polyolefins producer in the world, with a total production capacity of 13.6 million metric tonnes per year. It will operate across Europe, the Middle East, and North America, further strengthening its position in the global chemicals industry.

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Strategic Expansion and Financial Plan

To make this deal possible, ADNOC has signed an agreement to buy 100% of Nova Chemicals from Mubadala Investment Company. Additionally, Borouge Group International plans to include the Borouge-4 project, which is expected to be completed by the end of 2026 for $7.5 billion. This investment will further increase the company’s production capacity and boost its future growth.

Borouge Group International will have its headquarters in Austria, with regional offices in the UAE, Canada, the US, and Singapore. To maintain financial stability, the company is planning to raise $4 billion in capital by 2026. This will help secure its place in the MSCI stock market index while keeping a strong credit rating. The company aims to manage its debt carefully, targeting a net leverage ratio of up to 2.5 times its annual earnings before interest, taxes, depreciation, and amortization (EBITDA).

Ownership and Management

ADNOC and OMV will each own 46.94% of Borouge Group International, meaning both companies will have equal control. The remaining 6.12% of shares will be available for public trading, depending on regulatory approval in the UAE and shareholder agreements.

Dr. Sultan Ahmed Al Jaber, CEO of ADNOC, called this deal a “big milestone” in the company’s chemicals strategy. He highlighted that this move will establish a strong industry leader while enhancing Abu Dhabi’s role in the global chemicals market. He also emphasized that shareholders will benefit from this expansion.

Growth, Profit, and Dividends

Borouge Group International is expected to earn over $7 billion in EBITDA each year. The company also predicts that by working more efficiently, it can save $500 million, with 75% of these savings achieved within the next three years.

The company will continue to reward its investors with high dividends. It plans to pay out 90% of its profits as dividends and aims for a minimum annual payout of 16.2 fils per share. This represents a 2% increase compared to Borouge’s 2024 dividend per share.

OMV’s CEO, Alfred Stern, said this deal is a “huge step” in OMV’s chemicals strategy. He expressed confidence that partnering with ADNOC will create a global leader in polyolefins, improve profits, and support the shift towards sustainable and circular economy solutions.

Regulatory Approvals and Sustainability Goals

This transaction is expected to be completed in the first quarter of 2026, subject to regulatory approvals and other legal conditions.

Borouge Group International will focus on sustainability and eco-friendly solutions. The company will build on the environmental efforts of Borealis, Borouge, and Nova Chemicals. Both Borealis and Borouge have already committed to reaching net-zero carbon emissions (Scope 1 and 2) by 2050. After the deal is completed, Borouge Group International will announce its sustainability plan.

ADNOC’s Future Plans

Once the deal is finalized, ADNOC’s shares in Borouge Group International will be transferred to XRG, its global chemicals investment division. XRG will oversee the new company’s growth and look for more opportunities to expand ADNOC’s international chemicals business.

This landmark agreement marks a major step forward for ADNOC and OMV, creating a global powerhouse in the polyolefins industry. The partnership aims to drive innovation, boost financial performance, and reinforce their commitment to sustainability in the years to come.