WOOD Flash – OMV: agrees on Borealis, Borouge and Nova Chemicals deal with ADNOC
OMV and ADNOC have reached an agreement on the terms of the Borealis / Borouge merger, and plan to acquire Nova Chemicals at the same time. The resulting entity will be called Borouge Group International (BGI). OMV will inject USD 1.6bn into BGI in order to maintain an equal shareholding of 46.94% with that of ADNOC. Following completion, management plans a secondary offering of Borouge to increase the free float, maintain its credit rating, and ensure inclusion in the MSCI indices. BGI will be the world’s fourth-largest polyolefins company, with 13.6 mtpa of capacity, a wide geographical spread of customers and mid-cycle annual EBITDA of USD 7bn. Borouge’s dividends will be a minimum of USD 2.2bn per year and OMV’s dividends will be enhanced by its share of the payout, in our view. We believe that the deal makes strategic sense for all parties involved, and should add value for OMV and Borouge’s shareholders.
OMV is an international energy company with activities in Exploration and Production (E&P), Refining and Marketing including petrochemicals (R&M), and Gas and Power (G&P). Co. explores and develops oil and gas resources and supply energy to over 100 million people. OMV has three operating segments: Exploration and Production (E&P), Refining and Marketing, including petrochemicals (R&M), and Gas and Power (G&P), as well as the segment Corporate and Other (Co&O).
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