OMV and ADNOC today announced the signing of a binding agreement for the combination of their shareholdings in Borealis and Borouge into Borouge Group International. 

ADNOC has also entered in a share purchase agreement with Nova Chemicals Holdings GmbH, an indirectly wholly owned company of Mubadala Investment Company P.J.S.C. for 100 percent of Nova Chemicals for an enterprise value of USD 13.4 billion. 

ADNOC and OMV have also agreed that upon completion of the combination, Borouge Group International will acquire Nova Chemicals further expanding its footprint in North America.

Once fully operational, Borouge 4 is envisaged to be retransferred to Borouge Group International at the end of 2026 at cost, estimated to be approximately USD 7.5 billion. When combined, the three highly complementary world-class businesses will create the fourth-largest global polyolefin group with equal shareholdings by OMV and ADNOC.

The acquisition of Nova Chemicals, a North American-based polyolefin producer and a leader in advanced packaging solutions and proprietary technologies, will further strengthen Borouge Group International’s presence across the Americas and increase its exposure to advantaged feedstock. 

Borouge Group International will be uniquely positioned to create value and generate superior through-cycle shareholder returns, supported by synergies and a strong pipeline of organic growth projects. 

Alfred Stern, Chairman of the Executive Board and Chief Executive Officer of OMV, said:

“These landmark transactions represent a momentous step for OMV. They will accelerate our growth strategy in Chemicals and support OMV’s transformation into an integrated sustainable chemicals, fuels, and energy company. Together with ADNOC, our strategic partner of 25 years, we are creating a global polyolefins leader, exceptionally positioned for value creation by accessing the largest and most cost advantaged markets. We aim to significantly increase the sales volumes of innovative polyolefin premium products and be at the forefront of renewable and circular economy solutions. Together, OMV and ADNOC will build on a versatile and future-proof product portfolio and pursue significant organic growth opportunities. Most importantly, today’s agreement secures material synergies and long-term sustainable value creation for OMV’s shareholders. ADNOC and OMV have already proven that we are stronger together. We are convinced that we will unlock superior shareholder value on our joint path forward.”

His Excellency Dr. Sultan Ahmed Al Jaber, ADNOC Managing Director and Group CEO, said: “These transformative transactions mark a pivotal milestone in ADNOC's global chemicals strategy as we deliver on our international growth mandate. Building on our 25-year strategic partnership with OMV, we will create a new industry powerhouse, with a portfolio of premium products, cutting-edge technologies and worldwide market access. The visionary combination of Borouge and Borealis and acquisition of Nova Chemicals, further future-proofs ADNOC and solidifies Abu Dhabi's status as a leader in the chemicals sector, as we seek to meet the growing global demand for chemicals and associated products, while driving value creation and growth opportunities for our shareholders."

Landmark transactions to deliver growth and value creation
Under the terms of the transactions, Borealis and Borouge will be combined, with OMV injecting EUR 1.6 billion in cash - to be reduced by dividends paid out until completion -  into Borouge Group International to equalize shareholdings. 

The NOVA Chemicals transaction will be funded through acquisition debt, which is expected to be refinanced in the capital markets. The valuation implies an Enterprise Value to EBITDA multiple of around 7.5 on the basis of an expected through-the-cycle EBITDA of USD 1.8 billion. 

It is envisaged that Borouge Group International will raise up to USD 4 billion on the equity capital markets to achieve relevant MSCI index inclusion and augment an investment grade credit rating with a through-the-cycle net leverage target of up to 2.5 times EBITDA.

Borouge 4, the ethylene and polyethylene expansion project to Borouge’s production facilities in the UAE, will be developed outside of Borouge Group International. It is envisaged to be recontributed to Borouge Group International at the end of 2026 once fully operational, for an estimated USD 7.5 billion from OMV (30 per cent share) and ADNOC (70 per cent share). The project is expected to provide a through-the-cycle EBITDA contribution of around USD 900 million per year.