The merger of Borealis and Borouge to form an international petrochemical giant with sales of $30 billion seems unlikely to materialize. Despite appearing promising from an industrial perspective, the “Edelweiss” project has faced significant challenges due to cultural differences between Austria and Abu Dhabi.
The Austrians underestimated Adnoc, the state oil giant from Abu Dhabi, leading to a breakdown in negotiations with Mubadala, the international investment company representing Abu Dhabi. The cultural dynamics of discussions with Adnoc were described as deep and often aggressive, causing tension 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 has encountered obstacles due to Adnoc’s stance. 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 the government as they look forward to potential benefits that would come with it before national council elections. Negotiations continue between OMV and Adnoc despite complexities and uncertainties in their partnership history.
Despite these challenges, stakeholders brace for potential shifts in outcome as they continue with negotiations between two companies that once had strong historical ties but now face significant hurdles on their path towards becoming one international giant in petrochemicals industry.
