Merger Plan of €3 Billion Chemical Giant Hangs in the Balance, OMV Internal Disputes Intensify!

According to reliable sources, the planned multi-billion euro chemical industry merger between Borealis, a subsidiary of Austrian oil company OMV, and Borouge, an ABU Dhabi company, is facing major challenges. The merger plan aims to create a global leader in the chemical industry from scratch. If the merger plan is not successful, it will have a certain negative impact on OMV.

After a long period of intensive research and careful planning, OMV's negotiating team is working to advance a historic industrial deal that will undoubtedly leave a deep mark in China's economic history. The opponents involved in the negotiations are strong international partners. OMV is currently engaged in intense but orderly negotiations with ADNOC, the ABU Dhabi-based state holding company, over a joint venture between its chemicals division and the much larger Borouge with Borealis, a subsidiary of OMV. Once the negotiations are successful, a giant enterprise will be born in the forefront of the chemical industry in the world.

Since its inception, the project has faced a number of serious challenges relating to the true ownership structure, the distribution of voting rights and detailed rules for Arab owners. At the same time, the economic price OMV is reportedly paying for equal status has risen significantly. Courier-daily quoted an offer of up to €3 billion, which OMV has categorically denied. OMV's chief financial officer Reinhard Florey is negotiating on behalf of the Austrian side, but has hit a snag in the process with Adnoc manager Khaled Salmeen. The two men also disagree on other matters: Florey and Salmeen, who are members of the executive board, and Khaled Al Zaabi, chief financial officer of ABU Dhabi National Oil Company, have opposing interests as representatives of Adnoc's owners on OMV's supervisory board. The internally appointed ABU Dhabi co-owner currently holds 24.9% of OMV.

Harmony on the OMV supervisory Board has never really seemed to be achieved in the long history, and the recent situation has been particularly severe. News of the impending departure of Daniela Vlad, a new member of OMV Chemicals' board of directors, has been widely reported in the media, citing a lack of depth of expertise as the reason.

In the elite circles of Austrian economics, the event was seen as an unprecedented low point. Throughout, OMV's older managers have disagreed with the strategy of partially abandoning its traditional oil business and moving into chemicals, and saw the partnership with Borealis as a strategic highlight. Even under the leadership of Alfred Stern, the chief executive, who was fiercely defensive, internal opposition was never fully quelled.

If the proposed merger of the two chemical giants were to fail, it would not only miss an important opportunity for Austria's flagship company, but would also likely create a deep rift among OMV's many owners, including the Republic, thousands of shareholders, sovereign wealth funds and the Sultanate family of the United Arab Emirates.