London, March 04, 2025, (Oilandgaspress) ––Abu Dhabi National Oil Company (ADNOC) P.J.S.C. (ADNOC) and OMV Aktiengesellschaft (OMV) have agreed terms of a binding Framework Agreement (the Agreement) regarding the proposed combination of shareholdings in Borouge plc (Borouge) and Borealis AG (Borealis) (the Combination).
ADNOC has also entered into a share purchase agreement (SPA) with Nova Chemicals Holdings GmbH, an indirectly wholly owned company of Mubadala Investment Company P.J.S.C. (Mubadala) for 100% of Nova Chemicals Corporation (Nova), a leading North American polyethylene producer with 2.6 million metric tons (mt) of polyethylene capacity and 4.2 million mt of ethylene capacity. ADNOC and OMV have also agreed that upon completion of the Combination, Borouge Group International will acquire Nova for $13.4 billion including debt, further expanding its footprint in North America.
The acquisition, together with the recontribution of Borouge-4, would create a new $60+ billion global polyolefins champion, set to be the world’s fourth largest by nameplate production capacity. The acquisition implies a multiple of c. 7.5x forward through-the-cycle Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) and is expected to be debt financed through the capital markets.
Borouge Group International is intended to be headquartered and domiciled in Austria, with regional headquarters in the UAE. In addition, Borouge Group International will retain key corporate hubs in Calgary, Pittsburgh and Singapore. Borouge Group International will be listed on the Abu Dhabi Securities Exchange (ADX), subject to approval by the UAE Securities and Commodities Authority (SCA) and ADX. Under the terms of the Agreement, ADNOC and OMV will hold equal stakes of 46.94% in Borouge Group International, with joint control and equal partnership, with the remaining 6.12% in free float, subject to SCA approval and assuming all existing Borouge free float shareholders accept to exchange their existing shares in Borouge into shares in Borouge Group International.
Borouge Group International will combine the highly complementary strengths of three polyolefin leaders, including competitive feedstock, differentiated and premium quality product offering, direct access to growth markets, world-class technologies, and leading circularity credentials. With an extensive production footprint, innovation centers and global sales network, Borouge Group International is expected to have a combined polyolefins nameplate production capacity of approximately 13.6 million tons per annum (mtpa), including current organic polyolefin growth projects.
It is envisaged that Borouge Group International will raise up to $4 billion of primary capital in 2026, to achieve relevant MSCI index inclusion and augment an investment grade credit rating, with a target through-the-cycle net leverage of up to 2.5x EBITDA.
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.”
The Agreement strengthens the close collaboration and strategic partnership between ADNOC and OMV.
The proposed Agreement assumes a primary cash injection of €1.6 billion by OMV into Borouge Group International. The cash injection will be reduced accordingly upon closing due to adjustment of the equity value of Borouge and Borealis after expected dividend payments up to Completion. Borouge-4 is expected to be among the key growth drivers, with expected recontribution by end of 2026. Recontribution of Borouge-4, when fully operational, is expected to be at cost of approximately $7.5 billion including debt and accretive to operating cash flows and dividends per share (DPS), with an estimated through-the-cycle EBITDA of approximately $900 million.
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