Business

Abu Dhabi's Mubadala completes part stake sale in chemicals giant Borealis to OMV for $4.68b

Abu Dhabi's Mubadala completes part stake sale in chemicals giant Borealis to OMV for $4.68b

Dubai: Abu Dhabi's Mubadala Investment Co. has completed the sale of a stake in chemicals giant Borealis to the Vienna-headquartered energy company OMV. Mubadala will now have a 25 per cent shareholding in Borealis, while OMV holds the rest. The deal was pegged at $4.68 billion.

An initial agreement about the transaction was struck in March, and is now completed within "expected timeline and in accordance with all the regulatory requirements".

Musabbeh Al Kaabi, CEO - Petroleum & Petrochemicals at Mubadala Investment Company, said: “This transaction is well aligned with our strategy as a responsible investor and we are confident in the value this partnership will create for all three companies. Both OMV and Borealis are champions of the Mubadala portfolio, and this decision is consistent with our asset management model.

"We are aligned with OMV’s strategy to expand their value chain and support their growth in the chemicals space globally.”

Full entitlement

OMV is entitled to all dividends related to the additional shares in Borealis distributed after December 31, 2019. OMV will now fully consolidate the results of Borealis in its financial statements. In 2019, Borealis generated sales of 9.8 billion euros for a net profit of 872 million euros.

39%

Additional stake that OMV acquired from Mubadala

Vienna-based Borealis currently has more than 6,800 employees and operates in over 120 countries. The company provides services and products both directly and in collaboration with Borouge, a joint venture with the Abu Dhabi National Oil Company and with Baystar, a joint venture with Total in Texas.

The joint production capacities make OMV and Borealis the No. 1 producer of ethylene and propylene in Europe and one of the top 10 polyolefin producers worldwide. "The acquisition is a strategic extension of OMV’s value chain into high value chemicals," the statement said. "This provides a natural hedge against the cyclicality of each value chain step with respect to both volumes and market spreads, de-risking OMV’s exposure to volatile markets."