International Petroleum Investment Company (IPIC) of Abu Dhabi has agreed to acquire an additional 40% stake in Borealis from Statoil, the Norwegian oil company. The deal is valued around 800 million euros, and will increase IPIC's stake in Borealis from the present 25% to 65%, a press release said today.
It represents a major addition to IPIC's $4 billion + investment portfolio. It is also IPIC's single largest investment in its 20-year history. OMV, the Austrian oil and natural gas group in which IPIC owns a 17.6% stake, will acquire an additional 10% stake in Borealis, increasing OMV's share in Borealis to 35%. The transaction is subject to regulatory approvals with closing expected by the end of this year.
Borealis is a leading global producer and the second largest European manufacturer of polyethylene and polypropylene. It has annual sales volumes of 3.5 million tons, revenues of 4.6 billion euros and 4,550 employees at various sites in West Europe. In partnership with ADNOC, it established the Borouge petrochemical complex in Ruwais, Abu Dhabi. Based on competitive feedstock from ADNOC and Borealis' proprietary Borstar technology, Borouge has achieved excellent operational and financial results since its start up three and a half years ago. It has successfully completed a major expansion project earlier this year, increasing its capacity to 600,000 tons per year of polyethylene. Borouge is now in the final stages of planning for a new, larger petrochemical complex at the site with annual production capacities of 1.4 million tons of ethylene, 540,000 tons of polyethylene and 800,000 tons of polypropylene. This will pave the way for further expansion of the petrochemical sector in Abu Dhabi, and will help Borealis attain its strategic objective of reinforcing its competitive presence in the Middle East and Asia.
The deal marks a further strengthening of the relationship between IPIC and OMV. In addition to their joint ownership in Borealis, IPIC and OMV are partners in Pak-Arab Refinery Limited (PARCO) in Pakistan and AMI Melamine International GmbH in Austria. OMV holds a 10% stake in PARCO and contributed significant technical and operational know-how during the implementation of the refinery project in Multan, Pakistan. AMI and ADNOC have finalized the plans for a world scale 80,000 tons per year melamine joint venture at Ruwais.
IPIC is wholly owned by the Government of Abu Dhabi and is mandated to participate as equity investor in energy and energy-related projects and companies outside the Emirate of Abu Dhabi. Its current investments include substantial stakes in Hyundai Oilbank Co. in South Korea, Gulf Energy Maritime in Dubai, CEPSA in Spain, Pak- Arab Refinery Ltd. and Pak-Arab Fertilizers Ltd. in Pakistan and SUMED in Egypt.
Under the dynamic leadership of its Chairman, Sheikh Mansour Bin Zayed AI Nahyan, IPIC has adopted an aggressive policy of expansion. The acquisition of the Borealis stake represents the third addition to its portfolio this year, following its purchase of a 50% holding in AMI Melamine International GmbH and 20% in the Oman Polypropylene Project in Oman.
The company plans to continue to actively pursue attractive investment opportunities in the hydrocarbon sector in order to achieve the ambitious targets set by the Chairman.