Abu Dhabi National Oil Company has entered into formal negotiations with Austrian energy company OMV on the creation of a new combined petrochemicals holding entity.
The companies are proposing to merge their respective shareholdings in Borouge and Borealis.
The state energy company is negotiating as majority shareholder of Borouge and OMV as majority shareholder in Borealis. Any decision is subject to Borouge’s and other relevant parties’ governance processes, Adnoc said on Saturday.
“The potential merger would mark the next transformative milestone in Adnoc’s ongoing value creation and chemicals growth strategy, with any transaction subject to customary regulatory clearances,” the company said.
The OMV executive board has decided to pursue negotiations with Adnoc on a potential co-operation with respect to their polyolefins businesses, the Austrian company said.
“Such co-operation would include a potential combination of the Borealis and Borouge businesses as equal partners under a jointly controlled, listed platform for potential growth acquisitions to create a global polyolefin company with a material presence in key markets,” it added.
OMV said any transaction depended on a number of criteria, including the valuation of both businesses as well as the approval of the Austrian group's management and supervisory boards and antitrust authorities.
Adnoc acquired a 24.9 per cent stake in OMV from Abu Dhabi’s strategic investment arm Mubadala Investment Company in December. The financial terms were not disclosed.
Through the investment in OMV, which holds a 75 per cent stake in Austrian plastics maker Borealis, Adnoc increased its stakes in both Borealis and Borouge.
Vienna-listed OMV is among Europe’s largest energy companies. The company produces and markets fuels as well as feedstock for the chemical industry, and operates three refineries in Europe. OMV operates around 1,800 filling stations in ten European countries.
Borealis, which is majority owned by OMV and based in Vienna, is the eighth-largest producer of compounds such as polythene and polypropylene used in packaging, plastics and acrylics industries.
It provides services and products to customers globally, both directly and in collaboration with Borouge, a joint venture with Adnoc.
Adnoc bought Mubadala’s 25 per cent stake in Borealis last April. The deal will allow the state-owned oil and gas producer to expand its international footprint in the fast-growing chemicals and petrochemical sector.
In October 2020, Mubadala reduced its stake in Borealis to 25 per cent after it sold 39 per cent to OMV in a $4.68 billion deal.
Borouge, the joint venture between Adnoc and Borealis, is listed on the Abu Dhabi Securities Exchange. In May last year, Borouge raised $2 billion through an initial public offering on the ADX.
After its listing, Borouge was included in the FTSE Global Equity Index Series, which is used by investors globally to guide asset-allocation decisions and support portfolio construction.
Established in 1998, Borouge is a petrochemical company with a 3,100-plus workforce, serving customers in more than 50 countries across Asia, the Middle East and Africa.
It provides polyolefin solutions for the agricultural, infrastructure, energy, advanced packaging, mobility and healthcare industries.
Polypropylene, Borouge’s main product, is a thermoplastic material used in products including plastic packaging, car parts and textiles.
The global polypropylene market is projected to hit $167 billion by 2029, from about $121 billion in 2021, registering a compound annual growth rate of 4.2 per cent during the forecast period of 2022-2029, according to Data Bridge Market Research.
The UAE plans to triple its petrochemical production capacity from 4.5 million tonnes – currently produced entirely by the Borouge factory – by 2025.
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Muguruza's singles career in stats
WTA titles 3
Prize money US$11,128,219 (Dh40,873,133.82)
Wins / losses 293 / 149
57%20Seconds
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ONCE UPON A TIME IN GAZA
Starring: Nader Abd Alhay, Majd Eid, Ramzi Maqdisi
Directors: Tarzan and Arab Nasser
Rating: 4.5/5
UAE%20Warriors%2045%20Results
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Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
The specs
Engine: 4.0-litre V8 twin-turbocharged and three electric motors
Power: Combined output 920hp
Torque: 730Nm at 4,000-7,000rpm
Transmission: 8-speed dual-clutch automatic
Fuel consumption: 11.2L/100km
On sale: Now, deliveries expected later in 2025
Price: expected to start at Dh1,432,000
TO A LAND UNKNOWN
Director: Mahdi Fleifel
Starring: Mahmoud Bakri, Aram Sabbah, Mohammad Alsurafa
Rating: 4.5/5
How to become a Boglehead
Bogleheads follow simple investing philosophies to build their wealth and live better lives. Just follow these steps.
• Spend less than you earn and save the rest. You can do this by earning more, or being frugal. Better still, do both.
• Invest early, invest often. It takes time to grow your wealth on the stock market. The sooner you begin, the better.
• Choose the right level of risk. Don't gamble by investing in get-rich-quick schemes or high-risk plays. Don't play it too safe, either, by leaving long-term savings in cash.
• Diversify. Do not keep all your eggs in one basket. Spread your money between different companies, sectors, markets and asset classes such as bonds and property.
• Keep charges low. The biggest drag on investment performance is all the charges you pay to advisers and active fund managers.
• Keep it simple. Complexity is your enemy. You can build a balanced, diversified portfolio with just a handful of ETFs.
• Forget timing the market. Nobody knows where share prices will go next, so don't try to second-guess them.
• Stick with it. Do not sell up in a market crash. Use the opportunity to invest more at the lower price.
UAE currency: the story behind the money in your pockets
Killing of Qassem Suleimani
Brief scoreline:
Liverpool 5
Keita 1', Mane 23', 66', Salah 45' 1, 83'
Huddersfield 0
The story in numbers
18
This is how many recognised sects Lebanon is home to, along with about four million citizens
450,000
More than this many Palestinian refugees are registered with UNRWA in Lebanon, with about 45 per cent of them living in the country’s 12 refugee camps
1.5 million
There are just under 1 million Syrian refugees registered with the UN, although the government puts the figure upwards of 1.5m
73
The percentage of stateless people in Lebanon, who are not of Palestinian origin, born to a Lebanese mother, according to a 2012-2013 study by human rights organisation Frontiers Ruwad Association
18,000
The number of marriages recorded between Lebanese women and foreigners between the years 1995 and 2008, according to a 2009 study backed by the UN Development Programme
77,400
The number of people believed to be affected by the current nationality law, according to the 2009 UN study
4,926
This is how many Lebanese-Palestinian households there were in Lebanon in 2016, according to a census by the Lebanese-Palestinian dialogue committee
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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