The merger of Borealis and Borouge to form an international petrochemical giant with sales of $30 billion seems increasingly unlikely. The “Edelweiss” project, set to be finalized in September 2023, appeared promising from an industrial perspective. However, tensions between Austria and Abu Dhabi have escalated as the Austrians underestimated Adnoc, the state oil giant from Abu Dhabi.
The previously amicable negotiations with Mubadala, the international investment company representing Abu Dhabi, took a different turn when Adnoc acquired OMV shares last year. The cultural dynamics of discussions with Adnoc were described as deep and often aggressive, causing tension and discontent among Austrian stakeholders.
Concerns have arisen regarding key aspects of the deal, including the valuation of Borealis and Borouge and Austria’s protection from share dilution in the joint chemical company. OMV seeks to maintain control options but Adnoc’s stance has posed obstacles. The negotiations have been further complicated by geopolitics such as the EU Parliament vote against removing the United Arab Emirates from the FATF Gray List.
Pressure mounts on Adnoc to secure a successful deal given past failed takeover attempts. Speculation surrounds the negotiations surrounding Borealis’ valuation and Adnoc’s tough negotiation tactics. Despite uncertainties and challenges, OMV remains committed to the negotiations in the best interests of shareholders and employees.
The timeline for finalizing the merger is a priority for government officials who hope it will be completed before National Council elections next year. However, stakeholders are bracing for potential shifts in outcome as negotiations continue forward acknowledging historical partnerships between companies despite ongoing tensions.
In recent weeks, reports have emerged that OMV may consider delaying or even walking away from the deal if certain conditions are not met by Adnoc. While both parties remain committed to finding a solution that benefits everyone involved, it is clear that there are still significant obstacles that need to be overcome before this merger can become a reality.
As negotiations progresses further into 2023, stakeholders will need to keep an eye on developments closely in order to fully understand what is at stake in this complex deal between two powerful companies with competing interests at play.