OMV (OMVKY.US) partners with UAE's ADNOC to create a $60 billion global petrochemical giant.

OMV AG (OMVKY.US) has reached a key agreement with Abu Dhabi National Oil Company (ADNOC) to merge their polyolefins business and create a global chemical and plastics powerhouse valued at $60 billion. This statement marks the culmination of two years of negotiations between the two companies, with the formation of a joint venture to merge OMV's Borealis division with ADNOC's Borouge. ADNOC also stated in a statement on Monday that the deal includes the joint acquisition of Nova Chemicals, a subsidiary of Mubadala Investment Company PJSC, for $13.4 billion (including debt). The energy producer based in Austria, OMV, and the UAE state-owned company ADNOC, have been discussing the merger of their chemical divisions since July 2023. However, disputes over cash contributions and the headquarters of the company once stalled the agreement. Political inertia in Austria also slowed down the negotiation process, as the Vienna government was reluctant to approve such a major deal before the federal elections. After five months of joint negotiations, Christian Stocker was sworn in as the new prime minister on Monday. OMV stated in another announcement that it will inject 1.6 billion (approximately $1.7 billion) into the joint venture, which will be listed in Abu Dhabi and is planned to also list on the Vienna Stock Exchange in the future. The headquarters will be in Austria and named Borouge Group International. Assuming that the free float shareholders of Borealis accept the proposal of exchanging their shares for the new company's shares, ADNOC and OMV will each hold 47% of the new company. The free float percentage may further increase from 6%, with the issuance of $4 billion in new shares to fund the acquisition of Nova Chemicals, in which OMV and ADNOC will not participate. The transaction still needs to be approved by the OMV Supervisory Board, regulatory authorities, and an agreement on the implementation details.