Ship chartering giants Adnoc and Austria’s OMV are merging their polyolefin operations as part of an aggressive expansion strategy.
The combined $60bn company is also spending $13.4bn, including debt, on buying Canada’s Nova Chemicals Corp, an ethylene producer, to grow in North America.
The merged entity will be known as Borouge Group International and will be the fourth-largest polyolefins firm by production capacity, behind China’s Sinopec and China National Petroleum Corp and US-based ExxonMobil, Adnoc Downstream CEO Khaled Salmeen told Reuters.
The deal brings together producer Borealis, 75% owned by OMV and 25% by Adnoc, and Borouge, 54% owned by Adnoc and 36% by Borealis.
Adnoc has a huge gas carrier and tanker fleet through its Adnoc Logistics & Services operation.
Last year, Japan’s Iino Lines ordered a dual-fuel VLGC backed by a charter to Austria-based Borealis.
The tie-up “solidifies Abu Dhabi’s status as a leader in the chemicals sector”, Adnoc group CEO Sultan Al Jaber said.
Talks have been ongoing for two years over a transaction.
OMV will pump $1.68bn of cash into the new operation, which will be listed in Abu Dhabi.
Each side will own 47%, with the rest a free float.
The headquarters will be in Austria from the first quarter of 2026. A listing in Austria could take place in 2027.
Adnoc agreed in October last year to take over German producer Covestro for €14.7bn ($15.6bn).
Canada’s Nova can produce 2.6 tonnes per year of polyethylene and 4.2m tonnes of ethylene.
Borouge Group is expected to generate cost saving of $500m each year.(Copyright)
