Valued at over $30 billion! Abu Dhabi National Oil Company and Austrian Oil & Gas are exploring a merger

Abu Dhabi National Oil Company (Adnoc) and Austrian Oil and Gas (OMV) are discussing merging Borouge and Borealis to form a chemical giant valued at more than $30 billion.

OMV holds a 75% stake in Vienna-based Borealis, Austria, with ADNOC holding the remainder. Borouge, listed in Abu Dhabi, UAE, is a joint venture between ADNOC and Borealis with a market capitalization of approximately $22 billion.

According to Bloomberg recently, the owners of the two companies are discussing the potential value and ownership structure of the combined company, and may agree on formal terms of the merger in the coming weeks.

Borealis, including its stake in Borouge, is reportedly valued at about $10 billion. The combined entity's total valuation could exceed $30 billion (including potential synergies).

The source added that the talks have been on and off for several months and there is still a possibility that they could be delayed or stopped.

They noted that the two fundamental obstacles to reaching any agreement were specific value and ownership structures.

However, given a number of factors, including government regulation, the final agreement may not be reached.

The merger will give Adnoc and OMV the scale advantage they need to compete, simplifying the ownership structure. At the same time, it gives them more freedom to spend and grow in Asia, where demand for chemicals and plastics is currently rising.

Borealis, a leading producer of polyolefins and basic chemicals in Europe, generated total revenues of around €12.2 billion and a net profit of €2.1 billion in 2022. Borouge's 2022 revenue was $6.7 billion and full-year adjusted EBITDA was $2.6 billion.

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