Mubadala and OMV seal $4.68b Borealis stake deal
dubai — Mubadala Investment Company, Abu Dhabi’s strategic investment company, on Thursday completed the transaction for Vienna-based oil and gas company OMV to acquire an additional 39 per cent stake in leading chemicals company Borealis for $4.68 billion from Mubadala.
Following the initial agreement announced in March this year, the transaction was completed in line with the expected timeline and in accordance with all regulatory requirements, the two companies said in a statement.
Austrian oil major OMV now holds a 75 per cent interest in Borealis and the UAE wealth fund retains a 25 per cent interest in the company.
As per the deal, OMV is entitled to all dividends in relation to the additional shares in Borealis distributed after December 31, 2019. “OMV will fully consolidate the results of Borealis in its financial statements,” it said.
In 2019, Borealis generated total sales of €9.8 billion and a net profit of €872 million. The operating cash flow of Borealis — including dividends from its joint venture Borouge — amounted to €1.5 billion in 2019.
In the first nine months of 2020, Borealis achieved an operating cash flow including Borouge dividends of €1.1 billion, six per cent higher than the same period of last year, despite the difficult market environment due to the Covid-19 pandemic.
Musabbeh Al Kaabi, CEO for petroleum and petrochemicals at Mubadala Investment Company, said the transaction is well aligned with the company’s strategy as a responsible investor. “We are confident in the value this partnership will create for all three companies. 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,” he added.
The Abu Dhabi-based state fund Mubadala’s $232 billion portfolio spans six continents with interests in multiple sectors and asset classes.
Rainer Seele, chairman of the OMV executive board and CEO, said the transaction is another milestone in the implementation of our strategy.
“We are thus establishing an integrat
ed 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.”
According to the statement, the purchase price of the transaction amounts to $4.68 billion. Based on closing adjustments, the cash-out for OMV, net of cash acquired, is €3.8 billion.
The adjustments include the first quarter 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 billion, OMV paid the entire amount in full at closing.
“The acquisition is a strategic extension of OMV’s value chain into high value chemicals. This provides a natural hedge against the cyclicality of each value chain step with respect to both volumes and market spreads, de-risking OMV’s exposure to volatile markets,” said the statement.
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 Musabbeh Al Kaabi,
CEO for petroleum and petrochemicals at Mubadala Investment Company