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.
Alfred Stern, Chairman of the Executive Board and Chief Executive Officer of OMV, said: “These landmark transactions represent a momentous step for OMV. 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.”
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.
Strong Synergies and Attractive Dividend Policy
The proposed transactions are expected to unlock significant value for shareholders through the realization of operational and commercial synergies, improved global market access, accelerated rollout of new innovations, and sharing and scaling of advanced technologies. The majority shareholders estimate synergy potential of around $500 million additional run-rate EBITDA, with 75% expected to be realized within three years after Completion.
Borouge Group International is expected to generate a through-the-cycle EBITDA of more than $7 billion per annum. Supported by this stronger cash flow generation, the Company’s dividend policy will be based on a 90% payout ratio with potential upside for distribution based on free cash flow generation, with the objective of maintaining a minimum annual payout of 16.2 fils per share, representing a minimum 2% accretion vs. Borouge’s targeted full year 2024 DPS.
Committed to Circularity and Sustainability
Borouge Group International will target a leadership position in circular solutions, building on the existing initiatives of Borealis, Borouge and Nova to further develop its sustainable polyolefin solutions. Borealis and Borouge have both committed to reaching Scope 1 and 2 net zero emissions targets before 2050 with Borouge Group International’s sustainability strategy and targets to be rolled out post Completion.
Indicative Timetable
The combination of Borouge and Borealis and acquisition of Nova are currently expected to complete in first quarter of 2026, subject to regulatory approvals and other customary conditions.
XRG’s Global Chemicals Strategy
Upon completion, ADNOC’s stake in Borouge Group International will be transferred to XRG, complementing XRG’s Global Chemicals Platform, and fully supporting its global chemicals strategy and value creation agenda. As a strategic and value-add investor, XRG is committed to unlocking the full value potential of Borouge Group International through these transformative transactions, including the realization of synergies.
