After a sale to Russia was canceled due to the sanctions, the fertilizer division of the domestic OMV chemical subsidiary Borealis can now be sold to the Czech Republic. The European Commission approved the acquisition by the Agrofert group on Monday. Representatives of local agriculture see this as a “heavy blow” – until recently they protested violently against a sale.
The European Commission announced in a broadcast on Monday afternoon that the acquisition will not raise competition concerns in the European Economic Area.
The deal with Russia failed
Borealis last June announced the sale of the business, which includes fertilizers, melamine and technical nitrogen. The domestic chemical group and Agrofert are competitors in the agricultural and chemical sector with regard to the production and sale of nitrogen fertilizers, AdBlue and other technical nitrogen products.
The completion of the deal of 810 million euros was originally expected for November 2022. At the time, chemical subsidiary OMV wanted to sell its fertilizer activities to the Russian EuroChem for 455 million euros, but that transaction fell through due to Western sanctions against Russia. A few months later, a new buyer was found in the Agrofert group.
Strong resistance from agriculture
In Austria, until the very end, there was fierce resistance among the farmers to the sale to the Czechs. The Lower Austrian farmers’ association ÖVP “took note” of the decision on the Borealis deal on Monday and called for strict protective measures.
“A serious blow to the local economy, agriculture and above all to security of supply and thus to the whole of Austria,” said LH deputy chairman of the Farmers’ Union of Lower Austria. Stephan Pernkopf and Paul Nemecek, director of the farmers’ association of Lower Austria in a broadcast.
Czechia now with a monopoly position?
From the point of view of the farmers’ association, the merger will give the Agrofert group a monopoly-like position in the domestic fertilizer market. Borealis is 75 percent owned by OMV, 25 percent owned by Abu Dhabi sovereign wealth fund Mubadala. The company completed a turnaround program for its fertilizer business two years ago.
Agrofert has production sites in Germany, Slovakia and the Czech Republic and is owned by former Czech Prime Minister and current opposition leader Andrej Babis.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
