The Roadblock: Merger Between Borealis and Borouge on Hold as Adnoc Challenges Austrian Dominance in Petrochemicals Industry.
It appears that the merger of Borealis and Borouge, which was set to create an international petrochemical giant with $30 billion in sales, may have hit a roadblock. The “Edelweiss” project, scheduled for completion in September 2023, initially seemed promising from an industrial perspective. The state-owned OMV’s involvement in a larger entity made sense, as the state holding company ÖBAG negotiated the Austrian terms.
However, it seems that the Austrians underestimated Adnoc’s stance on the merger. The shift of OMV shares from Mubadala to Adnoc last year changed the dynamics of negotiations, with Adnoc taking a more assertive and aggressive approach. This change in tone has caused significant displeasure among Austrian stakeholders, who are questioning the treatment of Austria as a partner. As a result, the future of the deal now hangs in the balance as Adnoc and OMV struggle to reach consensus on key aspects like valuation and control.
Al Jaber is closely monitoring negotiations with OMV under pressure to make the merger succeed. While there are rumors about potential delays beyond the National Council elections, these are dismissed by those involved in the discussions. Despite these challenges, both OMV and Adnoc continue to negotiate in their shareholders’ and employees’ best interests. The outcome of these discussions will determine whether or not this proposed merger goes forward.
It is important to note that while there may be obstacles in place for this merger to happen successfully, it is not yet clear what these obstacles might be or if they can be overcome through further negotiation and compromise between all parties involved.
