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Austrian OMV and UAE´s Mubadala complete Borealis transaction

Austrian OMV and UAE´s Mubadala complete Borealis transaction

Vienna, October 30 - Neftegaz.RU. OMV and Mubadala Investment company on October 29 completed the transaction for OMV to acquire an additional 39% stake in Borealis, a leading, global chemicals company, from Mubadala.

Following the initial agreement announced in March 2020, the transaction was completed in line with the expected timeline and in accordance with all regulatory requirements. OMV now holds a 75% interest in Borealis and Mubadala retains a 25% interest in the company.

OMV will fully consolidate the results of Borealis in its financial statements. In 2019, Borealis generated total sales of €9.8 bln and a net profit of €872 mln. The operating cash flow of Borealis – incl. dividends from its joint venture Borouge – amounted to €1.5 bln in 2019. In the 1st 9 months of 2020, Borealis achieved an operating cash flow incl. Borouge dividends of €1.1 bln, 6 % higher than the same period of last year, despite the difficult market environment due to the pandemic.

Musabbeh Al Kaabi, CEO, Petroleum & Petrochemicals, Mubadala Investment Company: “Both OMV and Borealis are champions of the Mubadala portfolio, and this decision is consistent with our asset management model and our commitment to partner with like-minded players.”

Rainer Seele, OMV CEO: “This transaction is another milestone in the implementation of our strategy. We are thus establishing an integrated and sustainable business model extending OMV’s value chain towards higher value chemical products and recycling, thereby repositioning the Group for a lower carbon future.”

The purchase price of the transaction amounts to $ 4.68 bln. Based on closing adjustments, the cash-out for OMV, net of cash acquired, is €3.8 bln. The adjustments include the Q1 dividends to which OMV is entitled based on the increased shareholding, currency effects, and the cash position of Borealis at closing. Following the successful issuance of senior and hybrid bonds of €4.5 bln, OMV paid the entire amount in full at closing.

As a result of the synergies identified in the last few months, OMV is increasing the synergy potential from €700 mln to more than €800 mln. In addition, OMV has successfully started its divestment program, which will realize €2 bln by the end of 2021. The sale of the 51% share in OMV’s gas logistics subsidiary Gas Connect Austria has already been signed and will have a deleveraging effect of €570 mln for OMV.

With its head office in Vienna, Borealis currently has more than 6,800 employees and operates in over 120 countries. The company provides services and products to customers globally, both directly and in collaboration with Borouge, a joint venture with ADNOC and with Baystar™, a joint venture with Total in Texas, USA.

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