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Abu Dhabi National Oil Company (ADNOC) and Austria’s OMV have taken another step toward establishing Borouge Group International AG, signing a new agreement linked to the Borouge 4 production complex aimed at boosting earnings and operational efficiency.
The companies confirmed that the planned merger of Borouge Plc and Borealis AG, alongside the acquisition of Nova Chemicals, remains on track. The transaction is expected to close by the end of March 2026, subject to regulatory approvals and standard conditions.
Agreement to enhance profitability
Under the newly signed asset usage agreement, Borouge Plc—and eventually Borouge Group International AG—will operate and market production from the Borouge 4 complex in return for an at-cost utilisation fee.
The deal is projected to deliver approximately $400 million in cumulative net profit over three years and is expected to increase Borouge Plc’s annual earnings by around 10% once the facility reaches full capacity.
The arrangement will remain in effect until the new entity acquires the Borouge 4 asset, which is not expected before 2029.
Borouge 4 to expand production capacity
Borouge 4 is a major integrated polyolefins complex featuring a 1.5 million tonnes-per-year ethane cracker and polyethylene production capacity of 1.4 million tonnes annually.
The facility uses advanced Borstar technology to produce high-performance polyethylene and is jointly owned by ADNOC (70%) and OMV (30%). The first plant is expected to begin operations this quarter, with full ramp-up continuing through 2026.
Once completed, Borouge Group International AG is expected to have access to 13.6 million tonnes of production capacity across Europe, the Middle East, and North America, positioning it among the world’s leading polyolefins producers.
Listing plans linked to future capital raise
ADNOC and OMV also confirmed that a proposed tender offer to convert Borouge Plc shares into shares of the new entity will be aligned with a future equity raise.
The tender offer is expected in 2027, subject to market conditions and regulatory approvals. Until then, Borouge Plc will remain listed on the Abu Dhabi Securities Exchange, while the new entity will operate as a privately held company.
The companies added that Borouge Plc’s planned annual dividend of 16.2 fils per share will continue, supporting shareholder returns.
Upon completion of the transaction, ADNOC’s stake will be transferred to XRG, its wholly owned subsidiary, with XRG and OMV each holding a 50% stake in Borouge Group International AG.
