Abu Dhabi's Adnoc is to transfer its equity stakes in its listed companies to its international investment unit XRG, with the move not expected to affect operations, teams or the strategic direction of the entities.
The companies included in the transfer are Adnoc Distribution, Adnoc Drilling, Adnoc Gas and Adnoc Logistics and Services, all listed on the Abu Dhabi Securities Exchange, it said in a statement on Thursday.
Adnoc said it “will continue to retain control and ultimate ownership of the listed companies through its 100 per cent shareholding of XRG and reaffirms its commitment to long-term value creation and capital discipline”.
The internal administrative share transfers will have no impact on the day-to-day operations, leadership or strategic direction of the respective listed companies, it added. The companies’ dividend policies, capital allocation frameworks, indebtedness targets and mergers and acquisitions strategies also remain unchanged.
The transfer of Adnoc's majority shareholdings in Adnoc Distribution, Adnoc Gas and Adnoc L&S was effected on Thursday through an off-market transfer on the ADX, with the share transfer of Adnoc Drilling to take place following regulatory approvals.
Adnoc also confirmed that its entire stake in Fertiglobe is now held through XRG.
The internal transfers will “further strengthen XRG’s size and financial position, and drive its long-term development, through access to stable and attractive dividend streams, supported by the listed companies’ existing disciplined growth and capital return agendas”, Adnoc said.
XRG was launched last year as a global lower-carbon energy and chemicals investment company, with an enterprise value exceeding $80 billion. With headquarters in Abu Dhabi, it is focused on scalable energy solutions to help support artificial intelligence and industry.
The company has been expanding its operations globally and plans to double its asset value over the next decade, capitalising on energy transition, AI advances and the rise of emerging economies.
In July, Adnoc said it planned to transfer its 24.9 per cent stake in Austrian energy company OMV to XRG. Through the investment in OMV, which held a 75 per cent stake in Austrian plastics maker Borealis, Adnoc increased its stakes in Borealis and Borouge.
In March, Adnoc and OMV agreed on terms to merge their polyolefins business and create a $60 billion global company. They said the joint venture company, Borouge Group International (BGI), would combine Adnoc’s Borouge with OMV’s Borealis unit.
Adnoc has also signed a share purchase agreement with Nova Chemicals, a unit of Mubadala Investment Company, for the full acquisition of Nova.
On completion of the Borouge and Borealis merger, the new entity will take ownership of Nova for $13.4 billion, including debt, which will expand its footprint in North America.
“Upon receipt of regulatory approvals and the successful completion of the proposed transactions … Adnoc's entire stake in BGI will be transferred to and held by XRG,” Adnoc said on Thursday.
XRG’s chemicals platform aims to become a top-five global player, producing and delivering chemical and speciality products to meet a projected 70 per cent increase in global demand by 2050, Adnoc said last year. It is also investing in natural gas projects to meet growing demand for LNG.
In June, XRG made a $19 billion indicative offer to buy Australia's second-largest gas producer, Santos. Under the proposal, a consortium led by XRG, including Abu Dhabi's sovereign wealth fund ADQ and global investment firm Carlyle, proposed to acquire 100 per cent of the ordinary shares in Santos.
The company also said in December last year that it would become the majority shareholder of Covestro, after the German chemicals company’s shareholders accepted a takeover offer in a €14.7 billion ($17 billion) deal. However, that deal is currently being reviewed by the European Commission under its rules about foreign subsidies.
XRG has this year closed other international deals, including Arcius Energy, its joint venture with BP for upstream gas in Egypt, its stake in the Absheron gas and condensate field in Azerbaijan, and its participation in Offshore Block 1 in Turkmenistan.
