OMV Global

OMV decides to pursue negotiations with ADNOC on a potential cooperation regarding their polyolefins businesses

The Executive Board of OMV has just decided to pursue negotiations with ADNOC on a potential cooperation with respect to their polyolefins businesses. Such cooperation would include a potential combination of the Borealis and Borouge businesses as equal partners under a jointly controlled, listed platform for potential growth acquisitions to create a global polyolefin company with a material presence in key markets.

Borealis is one of the world’s leading providers of advanced and sustainable polyolefins solutions and a European front-runner in polyolefins recycling. Borealis is owned 75 per cent by OMV and 25 per cent by ADNOC. Borouge is a leading petrochemical company that provides innovative and differentiated polyolefin solutions. Borouge is owned 54 per cent by ADNOC, 36 per cent by Borealis with the remainder listed on the Abu Dhabi Securities Exchange (“ADX”).

“This potential transaction would have a strong and compelling industrial logic,” said Alfred Stern, Chairman of the Board and CEO of OMV AG. “Combining the two complementary businesses would bring together Borealis’ technological expertise, and specialty and sustainable polyolefins solutions, with Borouge’s advantageous cost position and access to attractive markets, that would create a new global polyolefin powerhouse with significant organic and inorganic growth potential.”

“This would build on more than 25 years of successful partnership with ADNOC and be one of the possible catalysts to achieve OMV’s Strategy 2030. At the same time, there are a number of transaction parameters that are subject to mutual agreement during the negotiation,” he added.

Any potential transaction would be in line with OMV’s stated acquisition criteria and capital allocation framework. Further announcement will be made as and when appropriate.

A potential transaction would, inter alia, be subject to (i) an agreement with ADNOC  on the commercial transaction parameters (including, inter alia, the valuation of the involved businesses) and the transaction documents in the upcoming negotiations, (ii) approvals of a potential transaction by the Executive Board and the Supervisory Board of OMV, (iii) approvals of a potential transaction by ADNOC, and (iv) approvals by authorities (such as merger control clearances).

Background information

OMV Aktiengesellschaft

With Group sales revenues of EUR 62 bn and a workforce of around 22,300 employees in 2022, OMV is amongst Austria’s largest listed industrial companies.

In Chemicals & Materials, OMV through its subsidiary Borealis, is one of the world’s leading providers of advanced and circular polyolefin solutions and a European market leader in base chemicals and plastics recycling. Together with its two major joint ventures – Borouge (with ADNOC, in the UAE and Singapore) and Baystar™ (with TotalEnergies, in the USA) – Borealis supplies products and services to customers across the globe. OMV’s Fuels & Feedstock business produces and markets fuels as well as feedstock for the chemical industry, operates three refineries in Europe, and holds a 15% stake in a refining joint venture in the UAE. OMV operates around 1,700 filling stations in eight European countries. In the Energy segment, OMV explores and produces oil and gas in the four core regions of Central and Eastern Europe, Middle East and Africa, North Sea, and Asia-Pacific. Average daily production in 2022 amounted to 392 kboe/d. Its activities also include the Low Carbon Business as well as the entire gas business.

OMV intends to transition from an integrated oil, gas, and chemicals company to become a leading provider of innovative and sustainable fuels, chemicals, and materials, while taking a leading global role in the circular economy. By switching over to a low-carbon business, OMV is striving to achieve net zero in all three Scopes by 2050 at the latest.

OMV shares are traded on the Vienna Stock Exchange (OMV) and as American Depository Receipts (OMVKY) in the U.S.