Abu Dhabi National Oil Co., operating as Adnoc, has made a strategic move in collaboration with Austria's OMV by agreeing to merge their polyolefins businesses, Borealis and Borouge, into a new joint venture. This joint venture is set to acquire Canada's Nova Chemicals, thus establishing itself as the world's fourth-largest polyolefin producer, with a valuation exceeding $60 billion. Under the terms of the binding framework deal, both oil giants, Adnoc and OMV, will retain a significant ownership stake of 46.94% each in Borouge Group International.
The remaining 6.12% interest is projected to be listed on the Abu Dhabi Exchange, as disclosed in a Monday announcement. As part of this strategic alignment, OMV will invest 1.61 billion euros into the newly formed, Vienna-based entity, paving the way for an additional listing on the Vienna Stock Exchange in the future. The joint venture's next step involves acquiring North American polyethylene producer Nova Chemicals from a subsidiary of Mubadala Investment Co., an investment firm linked to the government of Abu Dhabi, for an estimated total of $13.4 billion, including debt obligations.
This acquisition will significantly enhance the production capacity of Borouge Group International, which currently stands at 13.6 million tonnes per annum across regions such as Europe, the Middle East, and North America. The venture anticipates generating approximately $500 million in annual synergies from this merger. In a statement, Adnoc highlighted the complementary strengths that Borouge Group International will harness from the merged companies, promoting a competitive edge through superior feedstock access, a diverse range of premium product offerings, direct access to emergent market opportunities, world-class technologies, and strong commitments to sustainability and circular economic practices. Furthermore, with the backing of increased cash flow generation, Borouge Group International plans to distribute a minimum annual dividend of 0.162 dirhams per share, equating to a minimum 2% increase over Borouge's anticipated full-year 2024 dividend distribution.
In a subsequent release issued on Tuesday, Adnoc indicated that the completion of this transaction is expected by the first quarter of 2026, pending the fulfillment of customary closing conditions. OMV Chairman and Chief Executive Officer Alfred Stern expressed the company's determination to boost the sales volumes of innovative polyolefin premium products, emphasizing their commitment to leading solutions in renewable and circular economies.
He noted that the collaboration between OMV and Adnoc will lead to the development of a versatile and future-proof product portfolio aimed at capturing significant organic growth opportunities..