The transaction will increase OMV's stake from 36% to 75% in Borealis, while Mubadala will bring down its stake to 25%
Aerial view of Borealis location in Linz, Austria. (Credit: Borealis AG)
OMV revealed that it is negotiating a deal to acquire an additional stake of 39% in Austrian petrochemicals company Borealis from its joint venture partner Mubadala for $4.68bn.
The transaction will increase OMV’s stake from 36% to 75% in the petrochemicals producer, while the UAE-based Mubadala will bring down its stake to 25%.
OMV said that the potential deal will expand its value chain in the petrochemical sector and will enable it to fully consolidate the results of the petrochemicals producer in its financial statements.
The deal will be subject to definitive agreement with Mubadala, merger control clearances, and other approvals.
OMV revealed that its supervisory board did not finally deliberate and take a decision on the potential deal. However, the board is likely to take a respective decision as early as possible, said the Austrian oil and gas company.
Headquartered in Vienna, Borealis is among the largest polyolefin producers in the world. Alongside the Abu Dhabi National Oil Company (ADNOC), the company co-owns Borouge, a manufacturer of polyolefins based in Abu Dhabi.
Apart from polyolefins, the Austrian petrochemical company produces base chemicals such as melamine, phenol, acetone, butadiene, ethylene, propylene, and pygas, and also fertilisers. The company operates across more than 120 countries and has nearly 6,600 employees.
Recent developments at Borealis
In late 2019, the company forged a partnership with ADNOC, Adani Group, and BASF to carry out a joint feasibility study for establishing a chemical complex in Mundra in the Indian state of Gujarat. The firms are assessing the development of a joint propane dehydrogenation plant to produce propylene, which is planned to be used partially as feedstock for a polypropylene complex, owned by ADNOC and Borealis.
In September 2019, Borealis began construction on a new €1bn propane dehydrogenation plant at its existing production site in Kallo, Belgium. The new propane dehydrogenation facility is targeted to have a production capacity of 750,000 metric tonnes per year of propylene.