Adnoc and OMV in Talks to Merge Borouge and Borealis, Creating a Chemical Giant Worth Over $30B

Abu Dhabi National Oil Company (Adnoc) and Austria's oil and gas company OMV are reportedly in talks to merge their joint ventures, Borouge and Borealis, to create a chemical giant valued at over $30 billion.

OMV currently holds a 75% stake in Borealis, which is headquartered in Vienna, Austria, with the remaining shares held by Adnoc. Borouge, which is listed in Abu Dhabi, is a joint venture between Adnoc and Borealis, with a market value of around $22 billion.

According to recent reports by Bloomberg, the owners of both companies are discussing the potential value and ownership structure of the merged company, with a formal agreement potentially reached in the coming weeks.

Both parties reportedly value Borealis, including its stake in Borouge, at around $10 billion. The combined entity's total valuation could exceed $30 billion, including potential synergies.

Sources added that negotiations have been on and off for several months and could still be delayed or stopped, with specific value and ownership structure being the two fundamental obstacles to reaching any agreement.

However, a merger would provide Adnoc and OMV with the scale advantage they need to compete and simplify their ownership structures. It could also provide greater flexibility for their spending and growth in Asia, where demand for chemicals and plastics is on the rise.

Borealis is a major producer of polyolefins and basic chemicals in Europe, with total revenue of around €12.2 billion and net profit of €2.1 billion in 2022. Borouge had revenue of $6.7 billion in 2022, with a full-year adjusted EBITDA of $2.6 billion.