Abu Dhabi National Oil Company (Adnoc) has completed a USD 60 billion merger with Austria’s OMV, consolidating their petrochemical assets under Borouge Group International. The newly formed company will specialize in the production of polyolefins, essential plastics derived from oil and gas that are found in products ranging from packaging and toys to automotive components and construction materials, the Financial Times reported.
Adnoc and OMV announced that Borouge Group International, with an enterprise value exceeding USD 60 billion, would rank as the world’s fourth-largest polyolefins company and the second-largest outside China.
As electric vehicles reduce demand for gasoline and diesel, Middle Eastern oil producers like Adnoc are shifting towards chemicals derived from fossil fuels, including plastics. With the market poised for rapid growth, Adnoc has strengthened its position through strategic investments, including its EUR 14.7 billion acquisition of the German chemicals group Covestro in October, a leading producer of polyurethane foam used in appliances and insulation.
Khaled Salmin, Head of Processing at Adnoc, noted that the company’s production has surged nearly 50-fold over 25 years, from 450,000 tonnes to 13.6 million tonnes. He emphasised that petrochemicals would increasingly replace energy-intensive metals, particularly in the automotive industry, where modern vehicles use plastic for bumpers and interiors, making them more efficient and cost-effective.
Adnoc and OMV will each retain close to a 47% stake in Borouge Group International, a newly formed entity to be based in Austria and publicly traded in Abu Dhabi. The remaining shares will be available to public investors.
Abu Dhabi’s Adnoc is set to acquire Nova Chemicals, a major North American producer of polyethylene used in packaging, films, and bottles, and integrate it into the newly established Borouge Group International. Nova, currently owned by the UAE-based sovereign investor Mubadala, has an enterprise value of USD 13.4 billion, according to Adnoc and OMV. Meanwhile, OMV will inject EUR 1.6 billion into the new entity. These deals conclude a series of on-and-off negotiations between Adnoc and OMV that came close to finalising a merger of their chemical divisions in December 2023 before talks stalled.
Following the completion of the deal, Adnoc will transfer its stake in Borouge Group International to XRG, an investment vehicle it established last year to deploy its overseas profits. XRG’s board includes notable figures such as former BP CEO Bernard Looney.