UAE’s Adnoc Aims to Buy Nova Chemicals, Roll Into Deal With OMV

(Bloomberg) -- Abu Dhabi National Oil Co. and energy producer OMV AG are considering buying Canada’s Nova Chemicals Corp. and rolling it into an industry giant they’re seeking to create by merging two companies in which they have cross shareholdings. 

The government-owned company in the United Arab Emirates and the Austrian energy producer are in “constructive and positive” talks about a merger of two chemical units in which they’re both partners, Adnoc said in a statement on Saturday. The deal would create a chemical producer potentially valued at more than $30 billion. 

Adnoc and OMV said they’re in talks with the Abu Dhabi sovereign fund Mubadala Investment Co., which owns Nova Chemicals, about buying that company. Adnoc and OMV said in separate statements that they would then roll Nova Chemicals into a combined entity created from the merger of their two other businesses.

Adnoc and OMV have been in talks for at least 18 months to combine UAE-listed Borouge Plc with European chemicals producer Borealis AG and create a player in the polyolefin industry. The transaction would create a €30 billion ($31 billion) chemicals and plastics entity with access to technology and cheap feedstock.

A deal to buy Nova Chemicals would likely run into the billions of dollars. Adding the company’s plants in Canada and the US, including one in Louisiana on the Gulf Coast, would give the combined Borouge-Borealis business a greater North American footprint and access to plentiful natural gas. 

Both Adnoc and OMV are pursuing expansion in chemicals and natural gas to feed future energy demand and supply plastics for consumer products amid the energy transition.  

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