Mubadala Investment Company, Abu Dhabi’s strategic investment arm, completed the sale of a stake in global chemicals company Borealis to Austria’s OMV for $4.68 billion.
As part of the deal, which was initially announced in March, Mubadala sold an additional 39 per cent stake in Borealis to OMV. Vienna-based OMV now holds a 75 per cent interest in Borealis and Mubadala retains the rest.
“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,” Musabbeh Al Kaabi, chief executive of Petroleum and Petrochemicals at Mubadala, said in a statement on Thursday.
“Both OMV and Borealis are champions of the Mubadala portfolio, and this decision is consistent with our asset management model and our commitment to our partners."
Mubadala’s petroleum arm owns a 24.9 per cent stake in OMV and Mr Al Kaabi said it is aligned with OMV’s strategy to expand its value chain and will support its growth in the chemicals space globally.
Borealis, which is also based in Vienna, currently has more than 6,800 employees and operates in more than 120 countries. The company provides services and products to customers globally, both directly and in collaboration with Borouge, a joint venture with the Abu Dhabi National Oil Company and with Baystar, a partnership with Total in Texas.
Borealis, through Borouge, is undertaking two large-scale projects in Abu Dhabi's western region of Ruwais, including the development of the world's largest mixed-feed cracker and a fifth polypropylene unit. In 2019, Borealis generated €9.8bn ($11.48bn) in worldwide sales and a net profit of €872 million.
“This transaction is another milestone in the implementation of our strategy," Rainer Seele, chief executive of OMV, said.
"We are establishing an integrated and sustainable business model extending OMV’s value chain towards higher-value chemical products and recycling ... repositioning the group for a lower carbon future.”
OMV, which also operates an upstream concession offshore Abu Dhabi, is one of Austria’s largest-listed industrial companies with group sales of about €23bn. It is active in both upstream and downstream sectors of the energy value chain with operations in Europe, the Middle East, Africa and the Asia-Pacific region. The company’s production averaged about 487,000 barrels of oil equivalent per day in 2019.
OMV also operates three refineries in Europe and owns a 15 per cent stake in Adnoc Refining and Trading JV, with a total annual processing capacity of 24.9 million tonnes.
“The global demand for monomers and polymers is growing rapidly. Obtaining a controlling majority in Borealis makes OMV a leading provider of polyolefins and base chemicals,” the statement said.
Mubadala, with its $232bn asset base spanning six continents, invests on behalf of the Abu Dhabi government. It has investments across sectors including petrochemicals, technology, aerospace, real estate and infrastructure, among others.
Mubadala's petroleum and petrochemicals division – which has invested in assets such as Spain's Cepsa, Canada's Nova Chemicals as well as Russia's Gazprom Neft – is looking to expand its interest in the gas segment of the hydrocarbons value chain.
Mubadala last year reached an agreement with US firm NextDecade Corporation to invest $50m in the US company's upcoming Rio Grande liquefied natural gas facility. It also completed a deal to sell 37 per cent of Cepsa to US-based Carlyle Group last year.