Adnoc plans to transfer its 24.9 per cent stake in Austrian energy company OMV to its international investment entity XRG, as the Abu Dhabi company seeks to consolidate its global investments under the unit.
“Adnoc remains committed to its long-standing partnership with OMV through XRG and reaffirms its support for the company’s continued growth,” it said on Wednesday.
Adnoc had bought the stake in OMV from Mubadala Investment Company in December 2022. Through the investment in OMV, which held a 75 per cent stake in Austrian plastics maker Borealis, Adnoc increased its stakes in both Borealis and Borouge.
In March this year, Adnoc and OMV agreed to terms of a binding agreement to merge their polyolefins business and create a $60 billion global entity.
Under the framework agreement, the two companies said they will form a joint venture company, Borouge Group International (BGI), combining Adnoc’s Borouge with OMV’s Borealis unit. Adnoc has also signed a share purchase agreement with Nova Chemicals, a unit of Mubadala Investment Company, for the full acquisition of Nova.
On completion of the Borouge and Borealis merger, the new entity will take ownership of Nova for $13.4 billion including debt, which will expand its footprint in North America.
Adnoc is “progressing with preparation for the proposed establishment of Borouge Group International, which is set to be a top-four global polyolefins producer”, the company said on Wednesday.
Following the deal, BGI is expected be the world's fourth-largest polyolefin producer, as measured by nameplate capacity, with a capacity of 13.6 million tonnes per annum. That includes the expected addition of 1.4 mtpa capacity from Borouge-4 by the end of next year, at a cost of about $7.5 billion.
BGI will be headquartered and domiciled in Austria, with its regional headquarters in the UAE. The new entity, which will retain key corporate hubs in Calgary, Pittsburgh and Singapore, will be listed on the Abu Dhabi Securities Exchange.
Under the terms of the agreement, Adnoc and OMV will hold equal stakes of 46.94 per cent in BGI. The remaining 6.12 per cent will be free float, subject to the UAE's Securities and Commodities Authority's approval.
Adnoc's proposed 46.94 per cent shareholding in BGI is expected to be held by XRG upon completion of the transaction, subject to regulatory approvals, the company said on Wednesday.
XRG was launched last year as a global lower-carbon energy and chemicals investment company, with an enterprise value exceeding $80 billion. The company has been actively scaling up its operations globally and plans to double its asset value over the next decade, capitalising on energy transition, artificial intelligence advances and the rise of emerging economies.
XRG’s chemicals platform aims to become a top-five global player, producing and delivering chemical and speciality products to meet a projected 70 per cent increase in global demand by 2050, Adnoc said last year. It is also investing in natural gas projects to meet growing demand for LNG.
Last month, XRG made a $19 billion indicative offer to buy Australia's second-largest gas producer Santos. Under the proposal, a consortium led by XRG, including Abu Dhabi's sovereign wealth fund ADQ and global investment firm Carlyle, proposes to acquire 100 per cent of the ordinary shares in Santos.
