$60 Billion Merger Creates Global Polyolefins Powerhouse

Abu Dhabi National Oil Company (ADNOC) and Austria’s OMV have unveiled plans to merge their polyolefin businesses, creating a new chemicals powerhouse valued at $60 billion. The merger, which will combine ADNOC’s Borouge and OMV’s Borealis joint ventures, will see the formation of the Borouge Group International. This entity is poised to become the world’s fourth-largest polyolefins company by production capacity, behind industry giants Sinopec, CNPC, and ExxonMobil, according to ADNOC Downstream CEO Khaled Salmeen, who spoke to Reuters.

Polyolefins, including the widely used plastics polyethylene and polypropylene, are essential materials in industries ranging from packaging to automotive. The new group is set to capitalize on the growing global demand for these chemicals, with a goal of strengthening ADNOC’s position in the sector, particularly in North America.

Strategic Growth in North America

As part of the merger, Borouge Group will also acquire Canada’s Nova Chemicals Corp. from Abu Dhabi’s sovereign wealth fund, Mubadala, in a $13.4 billion deal that includes debt. This acquisition is part of ADNOC and OMV’s strategy to expand their footprint in North America, further enhancing the merged entity’s global reach, as both companies move toward securing a stronger presence in the global chemical market.

According to ADNOC Group CEO Sultan Al Jaber, the deal solidifies Abu Dhabi’s status as a leader in the chemical industry. “This tie-up further future-proofs ADNOC and solidifies Abu Dhabi’s leadership in the chemicals sector, as we seek to meet the growing global demand for chemicals and associated products,” he said.

Dividends and Financial Strategy

Per Reuters, the new company is expected to generate a strong dividend stream. OMV CEO Alfred Stern stated that Borouge Group could distribute annual dividends of approximately $2.2 billion based on the anticipated share structure. To equalize the shareholding, OMV will inject 1.6 billion euros ($1.68 billion) in cash into the company, which will be listed in Abu Dhabi.

After the cash infusion, ADNOC and OMV will each hold close to 47% of the merged entity, with the remaining shares available for free float. OMV’s shares saw a notable increase of as much as 4%, and they were up 0.28% at 0943 GMT, per Reuters.

Corporate Governance and Future Listings

The Borouge Group will be jointly governed by ADNOC and OMV, with a two-tier board structure ensuring equal representation. “The supervisory board will consist of five representatives from OMV, five from ADNOC, and potentially five employee representatives,” said OMV CEO Alfred Stern. The company’s headquarters will be based in Austria, but there are plans for an Austrian Stock Exchange listing as early as 2027, according to OMV CFO Reinhard Florey.

The deal, which marks the culmination of nearly two years of negotiations, is expected to close by the first quarter of 2026, subject to regulatory approvals. Per Reuters, the companies also plan to raise up to $4 billion in primary capital in 2026, aiming for inclusion in the relevant MSCI index.

Source: Reuters