Borouge merger to create world’s fourth-largest polyolefins producer

In a landmark consolidation move, Abu Dhabi National Oil Company (ADNOC) and Austrian energy and chemicals company OMV have merged their petrochemical businesses, Borouge Plc and Borealis AG, to form Borouge Group International AG, which is set to become the world’s fourth-largest polyolefins producer. The top three polyolefins producers globally include Sinopec, ExxonMobil Chemical, and Dow Inc. Completed on March 31, 2026, the transaction creates a global polyolefins powerhouse valued at over US$60 billion, underscoring a strategic push to scale up in high-growth materials markets.

The deal also includes the acquisition of Nova Chemicals for an enterprise value of US$13.4 billion, further strengthening the group’s manufacturing and technology capabilities. Headquartered in Vienna, with key regional operations in Abu Dhabi, the new entity combines a diversified global footprint with a robust production base. With an annual polyolefins capacity of approximately 13.6 million tonnes, Borouge Group International is poised to emerge as the world’s fourth-largest producer in its segment.

The company is structured as a 50/50 partnership between ADNOC, through its investment arm XRG, and OMV, reflecting a balanced governance model. The integration of Borouge and Borealis, alongside Nova Chemicals, is expected to enhance product innovation and enable the group to better cater to rising global demand for advanced and sustainable polymer solutions.

“The successful formation of Borouge International, completed on March 30, 2026, creates the fourth-largest polyolefins producer globally, as measured by nameplate capacity, combining premium products, proprietary technologies, and a global footprint. Borouge Plc is now part of Borouge International and is expected to benefit from the global footprint of the new platform, strengthening its long-term competitiveness and enhancing geographic diversification and scale to provide a broader base for future value creation, while maintaining a clear commitment to shareholder returns,” the company said in a statement.

The timing of the proposed tender offer, which will convert Borouge Plc shares into Borouge Group International AG shares, will align with the new company’s future equity raise to maximize value for all shareholders. The tender offer is expected to take place in 2027, subject to market conditions and approval by the United Arab Emirates Capital Market Authority.



Value creation
The merger is underpinned by a strong value creation agenda, with the combined entity targeting around US$500 million in run-rate EBITDA synergies within three years. These gains are expected to stem from operational efficiencies, optimized supply chains, and enhanced market access.

The transaction, completed on March 31, 2026, forms part of a broader strategy by Abu Dhabi National Oil Company (ADNOC) and OMV to diversify beyond traditional energy markets and deepen their presence in the global chemicals sector. By leveraging scale, technology, and geographic reach, Borouge Group International AG is well positioned to capitalize on long-term growth opportunities in the evolving petrochemicals landscape.

Driving shareholder value
Borouge Plc shareholders approved total dividend payments of US$1.32 billion for FY 2025 (16.2 fils per share) at the company’s Annual General Assembly held on April 7, 2026. This dividend is expected to be maintained by Borouge International through at least 2030, subject to shareholder approval. The final shareholder-approved dividend payment for 2025 amounts to US$658 million (8.1 fils per share) and is scheduled to be paid on or around May 5, 2026, to all shareholders of record as of April 17, 2026.

Under a recent favourable agreement with Abu Dhabi National Oil Company (ADNOC) and OMV, Borouge Plc has been granted operational control and marketing rights for the Borouge 4 mega project, requiring no upfront capital investment from the company. The agreement is expected to generate a cumulative net profit of approximately US$400 million over the next three years, representing around 10 percent annual earnings accretion for Borouge Plc following full ramp-up.

Borouge Plc also generated US$143 million in value during the quarter through its AI Digitalisation & Technology programme and advanced its 3D printing and digital warehouse initiatives. These efforts enabled the on-demand production of critical spare parts, contributing to reduced lead times and lower inventory carrying costs.

Focus on premium products
The successful formation of Borouge International on March 30, 2026, marks a significant milestone in the global petrochemicals landscape. The combined entity brings together premium product portfolios, proprietary technologies, and an expanded global footprint, positioning it to better serve evolving demand across key markets. The integration of capabilities is expected to enhance operational efficiencies and strengthen its competitive standing in an increasingly consolidated industry.

With Borouge Plc now part of the new platform, the company stands to benefit from greater geographic diversification and scale. This expanded reach is likely to improve resilience against regional demand fluctuations while opening up new growth opportunities across international markets. At the same time, the integration is expected to reinforce Borouge Plc’s long-term competitiveness, providing a stronger foundation for sustainable value creation while maintaining a clear commitment to shareholder returns.

Looking ahead, the proposed tender offers to convert Borouge Plc shares into Borouge Group International AG shares is strategically timed to coincide with the new entity’s future equity raise. This alignment is intended to maximize shareholder value by ensuring optimal market conditions and capital structure. The tender offer, anticipated in 2027 and subject to prevailing market conditions as well as approval from the UAE Capital Market Authority, represents a key step in consolidating the corporate structure and supporting the group’s long-term growth ambitions.

Strong production
In the first quarter, Borouge Plc recorded production volumes of 1.21 million tonnes, operating at 98% of nameplate capacity and demonstrating strong operational resilience. Unsold volumes were placed into storage for distribution in the coming months through effective inventory management and alternative logistics solutions, while the company continued to prioritise the safety of its people and the integrity of its assets.

As announced on April 6, an incident occurred at Borouge Plc’s production facilities in the Ruwais Industrial Area on April 5. Following a successful interception by air defence systems, falling debris caused damage to certain assets. Production activity in the affected areas was temporarily suspended after the incident. Following initial repairs to some of the impacted lines and a phased restart of the plant, most production units are now available and utilisation is ramping up. Inventory from unsold production in March is being sold into a higher-price environment in the second quarter, supporting consistent customer deliveries throughout the first half of the year.


DILIP KUMAR JHA
Editor
dilip.jha@polymerupdate.com