M&As: OMV/Adnoc to bundle Nova as part of proposed Borealis/Borouge merger; JFE Engineering to acquire major stake in Sumitomo Chemical Engineering

Austrian chemical firm OMV and vAdnoc (Abu Dhabi National Oil Company) say they are contemplating, subject to respective agreements with owner Mubadala Investment Company, a possible acquisition of Canada’s Nova Chemicals (by the future potential joint venture company) as part of OMV's and Adnoc's negotiations on a potential cooperation with respect to their polyolefins businesses.

Adnoc also said that it is in “constructive and positive” negotiations with OMV regarding the merger of UAE public-listed polyolefins maker Borouge and Austria’s Borealis AG. Both companies already share partnerships in these ventures, and the proposed merger would strengthen their combined expertise in the polyolefins sector.

This initiative could create an industry major with a value of over US$30 billion in the global chemicals sector and allow expansion into North America.

The two companies are also in discussions with Abu Dhabi’s sovereign wealth fund and the current owner of Nova Chemicals, Mubadala. Adnoc and OMV aim to acquire Nova Chemicals and integrate it into the newly formed entity resulting from the Borouge-Borealis merger.

Nova Chemicals operates plants in Canada and the US, including a significant facility in Louisiana along the Gulf Coast. The acquisition would provide Borouge-Borealis with a greater North American footprint and access to abundant natural gas resources, a vital feedstock.

The firms add that potential transactions would be subject to agreements on the commercial transaction parameters (including the valuation of the involved businesses) and the transaction documents in the ongoing negotiations.

Also it would be dependent on approvals of the potential transactions by the Executive Board and the Supervisory Board of OMV, and approvals by authorities (such as merger control clearances).

In other news, Japan’s JFE Engineering Corporation and Sumitomo Chemical Co have announced that they have reached an agreement for JFE Engineering to acquire 66.6% of the shares in Sumitomo Chemical Engineering Co, a wholly-owned subsidiary of Sumitomo Chemical. The acquisition is scheduled to be completed by March 31, 2025. Terms were not disclosed.

As a comprehensive engineering company within the JFE Group, JFE Engineering is widely engaged in engineering businesses across various fields such as energy, environment, and bridges & steel structures.

The chemical plant engineering sector, which is projected to see continued market growth, has been designated as a core focus area for EPC by JFE Engineering. Through this share acquisition, JFE Engineering aims to expand both its customer base and service areas.

Sumitomo Chemical Engineering, a wholly-owned subsidiary of Sumitomo Chemical, is a chemical plant engineering company with experience in design and construction of plants both domestically and internationally across a broad range of fields, including petrochemicals, fine chemicals, and the semiconductor manufacturing.

The acquired firm had a revenue of 27.1 billion yen (for fiscal year ended March 31, 2024).

Sumitomo Chemical Engineering intends to change its corporate name following the share transfer. However, it will maintain its relationship with Sumitomo Chemical Group.

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