OMV Wants to Bring Global Corporation to Austria Through Petrochemical Merger

"What we are creating here is an absolute bright spot," said OMV CEO Alfred Stern on Tuesday in a Reuters interview. "We are bringing a global chemical corporation with its headquarters to Austria."

OMV and ADNOC Agree on Merger of Petrochemical Subsidiaries

The path to this point was long and challenging. OMV and Adnoc negotiated for over a year and a half about the merger of their petrochemical subsidiaries Borealis and Borouge. On Monday, the contract was finally signed in Vienna. Under the name Borouge Group International, the world's fourth-largest polyolefin manufacturer with a company value of 60 billion dollars will be created. OMV and Adnoc will each hold just under 47 percent of the shares, as reported. For its share, OMV will contribute around 1.6 billion euros in equity to the new company.

Merger Was "Obvious" for OMV CEO Stern

Stern did not want to explain to Reuters who originally had the idea for the billion-dollar merger. "I would say it was obvious to take this step." The manager, who already led Borealis before his time as OMV CEO, emphasized that OMV has strategically utilized its strengths in the polyolefin business to continue growing, expand its geographical presence, and secure access to attractive raw material sources. Polyolefins are plastics used in packaging, everyday products, vehicle parts, and medical applications. Additionally, the market environment in the chemical industry is challenging. Therefore, mergers with synergy potential are particularly attractive. "Especially when significant savings can be realized," said Stern.

OMV CEO Stern Announces Higher Profit

"We are extremely pleased for OMV," said Stern, pointing out that the deal is financially advantageous and value-creating for shareholders. "We will achieve a higher cash flow, increase our earnings per share, and further strengthen our attractive dividend policy." Stern explains the lengthy negotiations with the high complexity of the deal - particularly due to the additional integration of Nova Chemicals. "This delayed the discussion somewhat."

Who will lead the new company in the future is still open. "The key is that we attract top talent for the board," Stern explained. Whether he himself is aiming for a role in the new corporation, he left open: "I am focusing on the implementation of the OMV strategy, where we are making great progress." He cited the Neptun Deep gas production project in the Black Sea - one of the largest development projects in the EU - as an example.

Adnoc will have the right to appoint the chairman of the supervisory board in the future, while the board will be jointly determined by both partners. The supervisory board is expected to include five representatives each from OMV and Adnoc, as well as likely five employee representatives. The new company is planned to be listed on the stock exchange in Abu Dhabi, as Borouge is already listed there. An additional secondary listing in Vienna is planned by 2027. The transaction is expected to be completed by the first quarter of 2026.

(APA/Red)

This article has been automatically translated, read the original article here.