Adnoc Buys 25% Stake in Borealis in Chemicals Expansion Push
(Bloomberg) -- Abu Dhabi National Oil Co. is buying a 25% stake in Borealis AG from Mubadala Investment Co., a move to expand the oil company’s footprint in the chemicals sector and gain access to key markets in Europe and the Americas.
The acquisition is part of a wider UAE plan to attract investment and technology and to help build new industries and manufacturing. State-owned oil producer Adnoc is expanding a refining and chemicals hub in Abu Dhabi to find additional outlets for its oil and natural gas production and to make the plastics and components that will go into consumer goods.
Austrian oil producer OMV AG will continue to hold the largest stake in Borealis, at 75%, with Adnoc taking control of Mubadala’s 25% holding. Neither Adnoc nor Mubadala, a government-owned fund based in the United Arab Emirates, disclosed financial terms of the deal.
While the transaction merely shifts the stake from one Abu Dhabi entity to another, it fits with the strategic aims of the two government-owned companies. Buying into Borealis will allow Adnoc to increase control over plastics maker Borouge, as that venture plans to list on the Abu Dhabi stock exchange later this year. Borouge, which would be valued at about $20 billion, is jointly owned by Adnoc and Borealis.
For Mubadala, the transaction is part of the company’s effort to streamline its holdings in oil refining and chemicals after acquiring assets in that industry following the takeover of another Abu Dhabi government fund International Petroleum Investment Co. in 2017. Since then, Mubadala has sold a stake in a Spanish refiner and said it would also offload its holdings in a Japanese oil processor.
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