ADNOC, OMV advance plans for forming Borouge Group with new agreement
Deal enables marketing rights, boosts earnings outlook and supports future listing plans
Dubai: Abu Dhabi National Oil Company and OMV AG said they have made further progress toward forming Borouge Group International AG, signing an agreement tied to the Borouge 4 production complex that is expected to lift earnings and improve operational flexibility.
The companies said the formation of Borouge Group International AG—through the combination of Borouge Plc and Borealis AG and the acquisition of Nova Chemicals—remains on track, with transaction close targeted by the end of March 2026, subject to customary conditions.
Deal to drive earnings growth
The newly signed asset usage agreement allows Borouge Plc, and later Borouge Group International AG, to operate and market output from the Borouge 4 complex in return for an at-cost utilization fee.
Expected to generate about $400 million in cumulative net profit over three years
Projected to add around 10% annually to Borouge Plc earnings after full ramp-up
The agreement is expected to remain in place until the new entity acquires the Borouge 4 asset, which is not anticipated before 2029.
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Expansion strengthens production
Borouge 4 is an integrated polyolefins complex featuring:
A 1.5 million tonnes-per-year ethane cracker
1.4 million tonnes of polyethylene capacity
The facility, which uses Borstar technology to produce high-grade polyethylene, is 70% owned by ADNOC and 30% by OMV. Startup of its first plant is expected this quarter, with operations ramping up through 2026.
Following the agreement, Borouge Group International AG is expected to have access to 13.6 million tonnes of nameplate production capacity across Europe, the Middle East and North America, positioning it among the world’s largest polyolefins producers.
Listing tied to future equity raise
ADNOC and OMV said the timing of a proposed tender offer—converting Borouge Plc shares into Borouge Group International AG shares—will align with a future equity raise.
Tender offer expected in 2027, subject to market conditions and regulatory approval
Borouge Plc will remain listed on the Abu Dhabi Securities Exchange until then
The new entity will remain privately held in the interim
Borouge Plc’s intended annual dividend of 16.2 fils per share will be maintained following the transaction, the companies said, supporting shareholder returns.
Upon completion ADNOC’s stake will transfer to XRG, its wholly owned subsidiary, and XRG and OMV will each hold a 50% stake in Borouge Group International AG.
