Petrochemicals giants OMV and Adnoc will merge their shareholdings in Borealis and Borouge and the new entity, Borouge Group International, will acquire Nova Chemicals for $13.4 billion, establishing the world’s fourth-largest polyolefins player.
Commenting on the transaction during a press conference, OMV CEO Alfred Stern said the merger is a "momentous step for OMV" which will "significantly enhance our feedstock position."
The deal will see the Austria-based company move its polyolefin production away from Europe. Stern said during the press conference that "one of the most attractive elements of the transaction, is the highly positive impact it will have on OMV access to cost advantaged feedstocks."
“Costs in Europe are five times higher compared to the Middle East and North America. With these transactions we will fundamentally shift our production,” Stern said.
Nova Chemicals acquisition
Adnoc has also entered into a share purchase agreement with Nova Chemicals Holdings GmbH for 100 percent of Nova Chemicals Corp., a leading North American polyethylene producer with 2.6 million metric tons of polyethylene capacity and 4.2 million tonnes of ethylene capacity.
Adnoc and OMV have also agreed that upon completion of the merger, the new Borouge Group International will acquire Nova for $13.4 billion including debt, further expanding its footprint in North America.
The two transactions will combine three polyolefin leaders — Borealis, Borouge and Nova — into a new global polyolefins giant worth over $60 billion, set to be the world’s fourth largest by nameplate production capacity.
Nova, based in Calgary, is one of North America's largest PE resin makers. The firm employs almost 2,500 worldwide and is wholly owned by Mubadala Investment Co., a state-owned investment group based in Abu Dhabi. Its holdings in North America include resin production in Joffre, Alberta; Sarnia, Ontario; Geismar, La.; and a new film recycling plant in Connersville, Ind.
Borouge Group International is expected to have a combined polyolefins nameplate production capacity of approximately 13.6 million tonnes per annum, including current organic polyolefin growth projects.
The merger of Borouge and Borealis and acquisition of Nova are currently expected to complete in the first quarter of 2026, subject to regulatory approvals and other customary conditions.
Currently, 59 percent of OMV’s polyolefin production is based in Europe, 7 percent in North America, and 34 percent in the Middle East. Following the merger, production is expected to shift to 50 percent in the Middle East, 20 percent in North America, and 30 percent in Europe.
Stern added that the "momentous transactions" will provide OMV with "greater resilience against market fluctuations." It will gain access to the "largest, most attractive and fastest growing markets across the Americas, Europe, Middle East and Asia," holding a "highly competitive cost position" with around 70 percent of its production capacity in "cost advantaged regions for feedstock."
Borouge Goup International
The new entity will be headquartered in Vienna with regional headquarters in Abu Dhabi and listed on the Abu Dhabi Securities Exchange (ADX), with plans for future dual listing in Vienna. The company will retain key corporate hubs in Canada, U.S. and Singapore.
Borouge Group International will be jointly controlled as an equal partnership between Adnoc (46.94 percent) and OMV (46.94 percent), with OMV injecting 1.6 billion euros in cash into the consolidated entity to equalize shareholding.
Stern emphasized during the press conference that OMV’s investment is not a payment to Adnoc, but a capital injection into the new company.
The new industry powerhouse is expected to achieve earnings before interest, taxes, depreciation, and amortization (EBITDA) around $500 million per year.
Borouge 4, the ethylene and polyethylene expansion project to Borouge’s production facilities in the United Arab Emirates (UAE), will be developed outside of Borouge Group International. The partners plan to recontribute it to Borouge Group International at the end of 2026 once fully operational, for an estimated $7.5 billion from OMV (30 percent share) and ADNOC (70 percent share). The project is expected to provide a through-the-cycle EBITDA contribution of around $900 million per year.
The through-the-cycle EBITDA of the Borouge Group International is expected to grow to more than $7 billion per annum with significant contribution from Borouge 4.
Circularity and sustainability
The partners said in a statement that Bourage Group International will target a "leadership position in circular solutions," building on the existing initiatives of the three constituent firms.
Borealis and Borouge have both committed to reaching Scope 1 and 2 net zero emissions targets before 2050. Borouge Group International will release its sustainability strategy and targets once the merger is completed.
“These landmark transactions represent a momentous step for OMV,” Stern said in a statement. “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.”
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."