meed-logo

line1 line2 line3
SIGN IN / REGISTER

Adnoc and OMV agree $60bn Borouge-Borealis merger deal

4 March 2025

Abu Dhabi National Oil Company (Adnoc) and Austrian energy company OMV have agreed the terms of a binding framework agreement for a proposed combination of their shareholdings in Abu Dhabi’s Borouge and Austria-based chemicals producer Borealis.

Adnoc has also entered into a share purchase agreement with Canada-based Nova Chemicals Holdings, an indirectly wholly-owned company of Abu Dhabi’s sovereign wealth institution Mubadala Investment Company, for 100% of Nova Chemicals Corporation (Nova).

Adnoc and OMV have also agreed that upon completion of the planned merger of Borouge and Borealis, the new entity – which will be known as Borouge Group International – will acquire Nova for $13.4bn including debt, further expanding its footprint in North America.

The acquisition, together with the recontribution of the upcoming Borouge 4 petrochemicals project in Abu Dhabi, will create a major polyolefins producer, valued at over $60bn, which will be the world’s fourth-largest by nameplate production capacity.

Borouge Group International is intended to be headquartered and domiciled in Austria, with regional headquarters in the UAE. In addition, Borouge Group International will hold corporate hubs in Canada’s Calgary, Pittsburgh in the US and Singapore.

The combination of Borouge and Borealis, and the acquisition of Nova, are expected to complete in the first quarter of 2026, subject to regulatory approvals and other customary conditions, Adnoc said.

“The agreement strengthens the close collaboration and strategic partnership between Adnoc and OMV,” the Abu Dhabi energy giant said in a statement.

Financial terms of the agreement

Borouge Group International will be listed on the Abu Dhabi Securities Exchange (ADX), subject to approval by the UAE Securities & Commodities Authority (SCA) and ADX.

Under the terms of their agreement, Adnoc and OMV will hold equal stakes of 46.94% in Borouge Group International, with joint control and equal partnership. The remaining 6.12% will be in free float, subject to SCA approval and assuming all existing Borouge free float shareholders agree to exchange their existing shares in Borouge for shares in Borouge Group International.

Upon completion of the deal, Adnoc will transfer its stake in Borouge Group International to XRG, its newly-formed investment company that focuses on low-carbon energy sources and the global chemicals value chain.

The acquisition implies a multiple of approximately 7.5 times forward through-the-cycle earnings before interest, taxes, depreciation and amortisation (Ebitda), and is expected to be debt financed through the capital markets. 

Borouge Group International is expected to raise up to $4bn of primary capital in 2026, to achieve relevant MSCI index inclusion and secure an investment-grade credit rating, with a target through-the-cycle net leverage of up to 2.5 times Ebitda.

The proposed agreement assumes a primary cash injection of €1.6bn ($1.67bn) by OMV into Borouge Group International. The cash injection will be reduced accordingly upon closing, due to adjustment of the equity value of Borouge and Borealis after expected dividend payments up to completion.

Paris-headquartered Rothschild & Co acted as the lead financial advisor to OMV on this transaction.

ALSO READ: Adnoc makes $16.3bn takeover offer for German chemicals firm

Borouge 4 – which is the fourth expansion phase of Borouge’s petrochemicals complex in Ruwais Industrial City – is likely to be among the key growth drivers, with projected recontribution by the end of 2026, when the estimated $6.2bn project is expected to be commissioned.

Recontribution of Borouge 4, when fully operational, is expected to be at a cost of approximately $7.5bn including debt, and accretive to operating cash flows and dividends per share, with an estimated through-the-cycle Ebitda of approximately $900m.

“The proposed transactions are expected to unlock significant value for shareholders through the realisation of operational and commercial synergies, improved global market access, accelerated rollout of new innovations, and sharing and scaling of advanced technologies,” Adnoc said.

The majority shareholders estimate synergy potential of about $500m additional run-rate Ebitda, with 75% expected to be realised within three years from the completion of the merger.

Borouge Group International is expected to generate a through-the-cycle Ebitda of more than $7bn a year.

Supported by this stronger cash flow generation, the company’s dividend policy will be based on a 90% payout ratio, with potential upside for distribution based on free cash flow generation. The company will aim to maintain a minimum annual payout of 16.2 fils ($0.04) a share, representing a minimum 2% accretion against Borouge’s targeted full-year 2024 dividends per share.

Production portfolio

When operational, Borouge Group International is expected to have a combined polyolefins nameplate production capacity of approximately 13.6 million tonnes a year (t/y), including current organic polyolefin growth projects.

Borouge will be the biggest contributor to the new entity in terms of polyolefins production potential, with the company’s output increasing to 6.4 million t/y when the Borouge 4 facility is commissioned in 2026.

Nova is a leading polyethylene producer in North America, with an output capacity of 2.6 million metric t/y of polyethylene, and 4.2 million metric t/y of ethylene.

Borealis is on course to increase its production capability to 600,000 t/y this year, with the company expecting output to rise three-fold to 1.8 million t/y by 2030, when planned acquisitions and projects are completed.

“Borouge Group International will combine the highly complementary strengths of three polyolefin leaders, including competitive feedstock, differentiated and premium quality product offering, direct access to growth markets, world-class technologies and leading circularity credentials,” Adnoc said in its statement.

The proposed entity will also benefit from “an extensive production footprint, innovation centres and a global sales network”, Adnoc added.

In addition, Borouge Group International will “target a leadership position in circular solutions, building on the existing initiatives of Borealis, Borouge and Nova to further develop its sustainable polyolefin solutions”.

Borealis and Borouge have both committed to reaching Scope 1 and 2 net zero emissions targets before 2050, with Borouge Group International’s sustainability strategy and targets to be rolled out after the completion of the merger and integration processes.

READ MEED’s YEARBOOK 2025

MEED’s 16th highly prized flagship Yearbook publication is available to read, offering subscribers analysis on the outlook for the Mena region’s major markets.

Published on 31 December 2024 and distributed to senior decision-makers in the region and around the world, the MEED Yearbook 2025 includes:

> GIGAPROJECTS INDEX: Gigaproject spending finds a level
https://image.digitalinsightresearch.in/uploads/NewsArticle/13455032/main3204.jpg
Indrajit Sen

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Bahrain’s willingness to disrupt takes flight with Air Asia

    14 November 2025

    Commentary
    Colin Foreman
    Editor

    As the smallest economy in the GCC, Bahrain has long understood that its competitive edge lies in being agile and prepared to disrupt established economic models.

    This proactive approach began decades ago with the deregulation of its telecoms sector, positioning it ahead of many GCC peers in opening that market. More recently, the same strategic foresight emerged in the fintech space with the early adoption of regulatory sandboxes and a supportive digital finance ecosystem.

    Bahrain’s disruptive lens is now focused on the aviation sector. At the Gateway Gulf investor forum in Manama on 3 November, Bahrain signed a letter of intent with Malaysia-headquartered Capital A Berhad and Air Asia. The agreement covers the establishment of a hub in Bahrain as low-cost carrier Air Asia and its related businesses expand beyond Asia into new markets, including Europe and Africa.

    A hub in Bahrain, which is located to the west of its existing hubs in Asia, will allow Air Asia to connect to the European and African markets, allowing it to develop a network that will be a low-cost alternative to the full-service airlines based in the Gulf that also bridge east and west, including Bahrain’s flag carrier Gulf Air.

    Bahrain and Air Asia will not be competing on scale; instead, they will disrupt with lower prices. This agility will allow the kingdom to carve out a distinctive niche in an otherwise highly competitive market.

    The strategic pivot is made viable by recent, essential capital investment in aviation infrastructure. A new terminal building was opened at Bahrain International airport in 2022. This has significantly increased passenger capacity and modernised operations, creating an attractive platform for a major international low-cost carrier like Air Asia to base its extensive operations.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15090817/main.gif
    Colin Foreman
  • Firms interested in Qiddiya high-speed rail revealed

    14 November 2025

     

    Register for MEED’s 14-day trial access 

    Saudi Arabia's Royal Commission for Riyadh City, in collaboration with Qiddiya Investment Company and the National Centre for Privatisation & PPP, have received interest from over 145 local and international companies for a contract to develop the Qiddiya high-speed rail project in Riyadh.

    These include 68 contracting companies, 23 design and project management consultants, 16 investment firms, 12 rail operators, 10 rolling stock providers and 16 other services firms.

    The lead developers and contractors that have expressed interest are:

    • Afcons Contracting Company / Shapoorji Pallonji (India)
    • Al-Omaier Trading & Contracting (local)
    • Al-Rashid Trading & Contracting Company (local)
    • Al-Rawaf Contracting (local)
    • Al-Ayuni Investment & Contracting Company (local)
    • AlBawani (local)
    • Al-Fahd Company (local)
    • Alghanim International (Kuwait)
    • Alkhorayef Water and Power Technologies (local)
    • Almabani General Contractors (local)
    • Amar (local)
    • Anjal Al-Khair Contracting (local)
    • Aviation Industry Corporation of China (China)
    • Bouygues Travaux Publics (France)
    • China Railway 18th Bureau Group (China)
    • China Harbour Engineering Company (China)
    • Built Industrial Company (local)
    • Cap France (France)
    • China Civil Engineering Construction Corporation (China)
    • China Machinery Engineering Corporation (China)
    • China Railway Construction Corporation (China)
    • China Railway International Group Co (China)
    • Copasa (Spain)
    • Dineshchandra R. Agrawal Infracon (India)
    • Dogus Insaat (Turkiye)
    • EDECS Contracting (Egypt)
    • El-Seif Engineering Contracting (local)
    • El-Soadaa Group (Egypt)
    • ElSewedy Electric (Egypt)
    • Esnad Contracting (local)
    • FCC Construccion (Spain)
    • Freyssinet (France)
    • Global Construction Development Solutions Company (local)
    • Gulermak (Turkiye)
    • Hassan Allam Construction (Egypt)
    • Hyundai Engineering & Construction (South Korea)
    • IC Ictas (Turkiye)
    • Imathia Construccion (Spain)
    • Kalyon Insaat (Turkiye)
    • Kolin Construction (Turkiye)
    • Larsen & Toubro (India)
    • Makyol (Turkiye)
    • Mapa Group (Turkiye)
    • Marubeni (Japan)
    • Mofarreh AlHarbi & Partners (local)
    • Mota-Engil (Portugal)
    • Mubarak Abdullah AlSuwaiket & Sons (local)
    • Nesma & Partners (local)
    • Nesma Infrastructure & Technology (local)
    • Nurol Construction (Turkiye)
    • Orascom Construction (Egypt)
    • Saudi Pan Kingdom (local)
    • Redco International (Egypt)
    • Rio Contracting (local) (local)
    • Rowad Modern Engineering (Egypt)
    • Safari Company (local)
    • Saipem (Spain)
    • Salcef (Spain)
    • Samama (local)
    • Samsung C&T Corporation (South Korea)
    • Saraya Al-Andalus (local)
    • Syneox (Cobra) (Spain)
    • The Arab Contractors (Egypt)
    • Twaik Holding (local)
    • UCC Holding (Qatar)
    • Webuild (Italy)
    • Yapı Merkezi (Turkiye)

    Expressions of interest have also been submitted by the following design and project management consultants:

    • Aecom (US)
    • AtkinsRealis (Canada)
    • Ayesa Engineering (Spain)
    • CH2M (USA)
    • Contrax International (UAE)
    • El-Raeid Consulting Engineers (Egypt)
    • Gensler (US)
    • Geoharbour (China)
    • Hatch (Canada)
    • Hill International (US)
    • Idom (Spain)
    • Introsoft Solutions (India)
    • Italferr (Italy)
    • KL Consults Associates (Malaysia)
    • Kunhwa Engineering and Consulting Company (South Korea)
    • Marrs Global (UK)
    • One Works (Italy)
    • PPMDC (local)
    • Rina Services (Italy)
    • Sener (Spain)
    • Surbana Jurong (Singapore)
    • Systra (France)
    • Typsa (Spain)

    Equity investors that expressed interest in the Qiddiya high-speed rail project are:

    • Aberdeen Investcorp (Bahrain)
    • AlGihaz Holding (local)
    • Almutlaq Real Estate Investment Company (local)
    • Arj Holding (local)
    • Foure Holdings (US)
    • Itochu Corporation (Japan)
    • Korea Overseas Infrastructure & Urban Development Corporation (Kind; South Korea)
    • Lamar Holding (local)
    • Mada International Holding (local)
    • Meritz Financial Group (South Korea)
    • MXB Investment (local)
    • Plenary (Australia)
    • Sojitz (Japan)
    • Tamasuk (local)
    • Vinci Concessions (France)
    • Vision Invest (local)

    The rail operators that submitted expressions of interest are as follows:

    • Alsa Grupo (Spain)
    • Alsaif Transportation Company (local)
    • DB International Operations (Germany)
    • Ferrovie dello Stato Italiane (Italy)
    • Intertoll Europe (Hungary)
    • Keolis (France)
    • Moventis (Spain)
    • MTR Corporation (Hong Kong)
    • Ratp Dev (France)
    • Renfe Operadora (Spain)
    • Serco (UK)
    • Transdev (France)

    Interest in the project was also expressed by the following 10 rolling stock and systems suppliers:

    • Alstom (France)
    • CAF (Spain)
    • Colas Rail (France)
    • CRRC (Hong Kong)
    • CRRC Changchun Railway Vehicles (China)
    • Hitachi Rail (Japan)
    • Hyundai Rotem (South Korea)
    • Siemens (Germany)
    • Stadler Rail (Switzerland)
    • Talgo (Spain)

    And finally, the other service providers that expressed interest in the project are:

    • Al-Nasser (local)
    • Alutec (Qatar)
    • Alvarez & Marsal (US)
    • Comatec (Finland)
    • Concrete Technology Company (UAE)
    • Generale Costruzioni Ferroviarie (Italy)
    • Hogan Lovells (UK)
    • Indra (Spain)
    • Intellex Consulting Services (US)
    • International SOS (UK)
    • Najd Wire Industries Company (local)
    • Rawasi Albina (local)
    • Smart Directions (local)
    • STC (local)
    • Workforce Staffing Solutions (UAE)
    • Zebraware (UK)

    The firms submitted their expressions of interest on 12 October, as MEED reported.

    The clients issued the notice to the market in September.

    The Qiddiya high-speed rail project will connect King Salman International airport and King Abdullah Financial District (KAFD) in Riyadh with Qiddiya City.

    Also known as Q-Express, the railway line will travel at speeds of up to 250 kilometres an hour, reaching Qiddiya in 30 minutes.

    The project was previously planned to be developed under a conventional model, but will now progress under a public-private partnership (PPP) model.

    The line is expected to be developed in two phases. The first phase will connect Qiddiya with KAFD and King Khalid International airport.

    The second phase will start from a development known as the North Pole – which is understood to include the Public Investment Fund’s proposed 2-kilometre-tall tower – and travel to the New Murabba development, King Salman Park, central Riyadh and Industrial City in the south of Riyadh. 

    In November 2023, MEED reported that French consultant Egis had been appointed as the technical adviser for the project.

    UK-based consultancy Ernst & Young is acting as the transaction adviser on the project. Latham & Watkins is the legal adviser.

    Qiddiya is one of Saudi Arabia’s five official gigaprojects and covers a total area of 376 square kilometres (sq km), with 223 sq km of developed land. 

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15090776/main.gif
    Yasir Iqbal
  • Meraas awards $120m Citywalk expansion project deal

    14 November 2025

    Register for MEED’s 14-day trial access 

    Local real estate developer Meraas has awarded a AED440m ($120m) contract for the construction of the Northline residential project in the Al-Wasl area of Dubai.

    The contract was awarded to the local GCC Contracting Company.

    The project includes the construction of three residential buildings. Construction works are expected to begin shortly and the project is slated for completion by 2027.

    The enabling works were undertaken by the local International Foundations Group.

    The project is part of the recently announced City Walk expansion project.

    In June, Merass announced the City Walk Crestlane project as it continued its expansion of the City Walk residential community.

    City Walk Crestlane comprises two residential towers offering 198 one- to five-bedroom units.

    The project is expected to be completed and handed over by the third quarter of 2028.

    Meraas’ latest project contract award in Dubai is backed by heightened real estate activity in the UAE’s construction market. Schemes worth over $323bn are in the execution or planning stages, according to UK analytics firm GlobalData.

    The company forecasts that the output of the UAE’s construction sector will grow by 4.2% in real terms in 2025, supported by developments in infrastructure, energy and utilities, as well as residential construction projects.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15090114/main.png
    Yasir Iqbal
  • Contractors prepare bids for Aramco gas compression project

    13 November 2025

     

    Register for MEED’s 14-day trial access 

    Saudi Aramco is making progress with the main contract tendering process for a project to boost gas compression capacity at the Shedgum and Uthmaniya processing plants in the kingdom’s Eastern Province.

    The Shedgum and Uthmaniya plants currently receive approximately 870 million cubic feet a day (cf/d) and 1.2 billion cf/d of Khuff raw gas, respectively.

    Through this multibillion-dollar project, Aramco aims to increase the compression and processing capacity of the two plants, as well as to construct new pipelines to enhance gas transport.

    Contractors are preparing bids for several engineering, procurement and construction (EPC) packages of the Shedgum and Uthmaniya gas compression capacity expansion project. Aramco has set a bid submission deadline of 17 November, according to sources.

    The Saudi energy giant is understood to have started the solicitation of interest process for the main EPC contract tendering exercise in the fourth quarter of last year.

    Aramco then issued the tenders for the EPC packages of the scheme during the second quarter of this year and set an initial bid submission deadline of 17 August, the sources said.

    In line with its aim of increasing gas production and processing capacity by 60% by 2030, with 2021 as its baseline, Aramco is investing significant capital in gas projects in the kingdom this year.

    Aramco’s capital expenditure (capex) in the third quarter of 2025 stood at $12.55bn, a marginal year-on-year increase of 2%. For the first nine months of the year, the firm registered capex of $37.41bn, an increase of 3.38% compared to the same period last year.

    The company previously announced capital investment guidance in the range of $52bn-$58bn for 2025, excluding around $4bn of project financing.

    ALSO READ: Aramco turns attention to strategic projects

    READ THE NOVEMBER 2025 MEED BUSINESS REVIEW – click here to view PDF

    Mena players up the ante in global LNG production race; Investment takes UAE non-oil economy from strength to strength; Project finance activity draws international lenders back to market

    Distributed to senior decision-makers in the region and around the world, the November 2025 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/15075053/main4642.jpg
    Indrajit Sen
  • Aramco Stadium races towards completion

    12 November 2025

     

    Register for MEED’s 14-day trial access 

    The Aramco Stadium in Khobar is moving forward at an impressive pace as the fast-track project races towards completion in 2026.

    The 47,000-seat stadium will be the new home for the Aramco-owned Al-Qadsiah Club and a key venue for the 2027 AFC Asian Cup and the 2034 Fifa World Cup. 

    The project’s progress stems from detailed planning and an accelerated delivery strategy. The project was conceived in May 2023, with the design process, managed by Aramco, commencing shortly thereafter. 

    “We completed the design within six months,” said Mohammed Subhi, the Aramco Stadium’s project manager.


    The project advanced quickly due to thorough planning and a fast-track delivery approach. Initiated in May 2023, the design phase—overseen by Aramco—was completed within six months

    An early engagement approach with the main contractor – a joint venture of Besix and Al-Bawani – was instrumental in maintaining momentum. This partnership began early in 2024, allowing for collaborative input on critical construction elements. 

    This upfront collaboration minimised pre-construction time, ensuring a rapid transition to site work.

    Engineering challenges

    The stadium’s architectural design, inspired by the natural whirlpools of the Gulf and featuring interwoven transparent sails, presents significant engineering challenges, particularly in the structural steel and façade work. For spectator comfort, the stadium is equipped with full cooling systems and designed to the highest international standards.

    Logistics management is another crucial facet of the project, which is located in central Khobar. With thousands of workers on site, the movement of materials is tightly controlled to minimise community disruption. 

    “We control how many trucks can enter the site and at what time. For example, we cannot cast concrete during the day. It has to be after 6pm, up until the early morning,” said Subhi.

    A key priority on site is health and safety, an area where the organisation’s legacy from its oil and gas operations is clearly visible. Subhi explains that the principle of health and safety is part of the company’s DNA and is embodied in the deployment of advanced technology and rigorous standards, which have collectively resulted in over 10 million safe working hours to date.

    The project employs a sophisticated Smart Safety Command Centre (SCC), which utilises artificial intelligence-based monitoring and 24/7 surveillance. One key feature of the centre is the crane collision prevention system – a key technological advancement in heavy machinery coordination and a first for the region. 

    “We have tower cranes and crawler cranes talking to each other. The anti-collision system means cranes talk to each other without human interference, and they automatically shut down when they are too close to each other,” said Subhi.


    A key technological advancement is the crane collision prevention system, which means the cranes talk to each other and shut down if they become too close

    In addition to ground operations, the project is leveraging aerial technology to mitigate risk in high-altitude work.

    “We have used drones for the inspection of the cranes and inspection of the steel structure itself to minimise the risk of working at height,” said Subhi.


    Drones have been adopted on-site to mitigate the risk of working at height

    Worker welfare

    The project’s commitment extends beyond mere regulatory compliance to comprehensive worker welfare, establishing a high standard for construction sites in the region. 

    With current staffing reaching approximately 11,000 direct and indirect workers, welfare provisions are a core priority, linking directly back to Aramco’s corporate standards.

    In a region where extreme heat is a constant challenge, the project has implemented advanced heat stress management protocols. This includes the installation of heat sensors with alarm systems, mandatory work stoppage during peak heat hours and regular briefings on heat exhaustion symptoms. Fully air-conditioned rest areas are provided for breaks and meals.

    Aramco is also committed to developing national talent. A significant proportion of the staff are young, and about 20% of the team are women.

    The relationship with the joint-venture contractor is defined by collaboration rather than traditional client-contractor hierarchy. “We are one team, working together,” said Subhi. This approach has fostered a cooperative environment that is accelerating the on-site progress towards the 2026 completion goal. 

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15073939/main.gif
    Colin Foreman