Austria's OMV and Abu Dhabi-based Mubadala Investment Company, signed an agreement that will give OMV a controlling stake in Borealis, one of Europe’s leading petrochemical companies, for US$4.68 billion.
OMV, which currently owns a 36 per cent stake in Borealis, will acquire an additional 39 per cent from Mubadala, increasing its stake to 75 per cent. Mubadala will retain a 25 per cent interest.
The closing of the transaction is expected by the end of 2020 and is subject to regulatory approvals.
OMV will fully consolidate the results of Borealis in its financial statements. In 2019, Borealis generated worldwide total sales of EUR 9.8 billion and a net profit of EUR 872 million.
Rainer Seele, Chairman of the OMV Executive Board and CEO: “This transaction is not just another milestone in the implementation of our strategy, but the biggest transformation in OMV’s history. This turns OMV into a global oil, gas and chemicals group, whose integrated business model extends from the wellhead to high-quality plastic and repositions the Group for a low carbon future.”
Khaldoon Al Mubarak, Managing Director and Group CEO, Mubadala Investment Company, said: “Today marks the culmination of several months of intense discussions between OMV and Mubadala. We have signed a landmark, multi-billion dollar deal, the largest in both Mubadala and OMV‘s history. It is also fully aligned with our long-term strategy as a company.”
Musabbeh Al Kaabi, CEO, Petroleum & Petrochemicals, Mubadala, said: “We remain very confident in Borealis as a leading company in its sector. We will continue to hold a significant interest in the company, through the direct 25 per cent interest that we will retain, along with our existing 24.9 per cent shareholding in OMV. As a significant shareholder in OMV, we recognise the strong strategic fit and the complementary nature of Borealis’s business in expanding its downstream position.”
“The market for sustainable chemicals, and the circular economy volumes, is very interesting and showing strong growth. Both OMV and Borealis have recognized this opportunity and will now combine forces. This extends the value chain even further, namely beyond the life cycle of plastic products”, Thomas Gangl, Executive Board Member and Chief Downstream Operations Officer, said.
Borealis’ activities in plastic recycling, such as recycling plants EcoPlast (Austria) and MTM Plastics (Germany), Project STOP (Ocean Waste) and the Design For Recycling (DFR) initiative are a perfect addition to OMV’s ReOil technology for chemical recycling of post-consumer-plastic to synthetic crude.
OMV said that the financing of the transaction is to be supported by a divestment programme, synergies and an active cash flow management. With the transaction, OMV announced a divestment programme of EUR 2 billion until the end of 2021.