According to insiders, the multi-billion dollar merger between OMV subsidiary Borealis and Abu Dhabi company Borouge – which would immediately create one of the world’s largest chemical players – is shaky. Failure would have negative consequences for OMV.
Question: Can you negotiate too hard and too cautiously at the same time? The answer: yes, you can. At least the negotiating delegation of OMV, which has been discussing and planning the largest industrial deal in domestic economic history for several months, or years in total. The negotiating partner, or alternative opponent, is not just anyone. The project name of the possible mega-merger is catchy and funny at the same time: “Edelweiss”.
OMV and Abu Dhabi-based state holding company Adnoc are currently negotiating a joint venture between Adnoc’s chemical division, larger company Borouge and OMV subsidiary Borealis. One of the world’s largest chemical players would emerge from nothing.
Paying billions to be on an equal footing?
From the start, it was difficult, regardless of whether it was about real shares, voting rights or detailed rules for the Arab owners. In the meantime, the amount that OMV would have to pay to get to eye level has also risen considerably. The “Kurier” even quoted three billion euros, which OMV sources dispute. OMV CFO Reinhard Florey is negotiating for Austria, but doubts Adnoc manager Khaled Salmeen.
The two men are not on friendly terms: Florey is on the board, Salmeen sits next to Khaled Al Zaabi, CFO of the Abu Dhabi National Oil Company, as a representative of the Adnoc owner on the supervisory board of OMV. The internally named co-owners in Abu Dhabi own 24.9 percent of OMV.
Rumors are circulating that the OMV Chemicals board member will leave soon
Historically, things have never been harmonious in the OMV supervisory board, but recently things have become more difficult: the impending departure of the relatively new OMV Chemicals board member, Daniela Vlad, due to a lack of depth in specialist knowledge, is already making the rounds in the media.
In Austria’s most financially powerful snake pit, this is considered a new low. From the beginning, the old OMV managers had resisted the partial abandonment of the classic oil sector and a reorientation towards chemistry, culminating in the Borealis marriage. CEO Alfred Stern, who acted very defensively, never managed to eliminate the internal crossfire 100 percent.
If the merger of the chemical giants fails, it would not only be a huge missed opportunity for Austria’s premier company, but also a rift between OMV owners such as the Republic, thousands of shareholders, the sovereign wealth fund and the Sultan’s family in the economy. Emirates.
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.
