Mergers and Acquisitions

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escveritas
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Mergers and Acquisitions

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  • Proposed merger of Premier and Chrysaor Holdings Limited (“Chrysaor”) and the reorganisation of Premier’s existing finance arrangements
06 Oct 2020

Premier and Harbour are pleased to announce that they have reached agreement with Harbour’s UK operating company Chrysaor, regarding a proposed all share merger between Premier and Chrysaor (the “Combined Group”) and the reorganisation of Premier’s existing debt and cross-currency swaps (together, the “Transaction”).

The Transaction will create the largest independent oil and gas company listed on the London Stock Exchange with combined production of over 250 kboepd (as at 30 June 2020). In addition, the Combined Group will have a strong balance sheet and significant international growth opportunities.

Key highlights
  • Premier to merge with Chrysaor through a reverse takeover; London listing retained
  • The Transaction is expected to result in Premier’s stakeholders owning up to 23 per cent of the Combined Group and Harbour and other Chrysaor shareholders owning at least 77 per cent
Premier’s shareholders are expected to own up to 5.45 per cent1 of the Combined Group
Chrysaor’s largest shareholder, Harbour, is expected to own up to 39.021 per cent of the Combined Group
  • Premier’s approximately US$2.7 billion of total gross debt and certain hedging liabilities will be repaid and cancelled on completion
A cash payment of US$1.232 billion will be made to financial creditors of Premier and its subsidiaries (together, the “Premier Group”) and Premier Group’s cross-currency hedge counterparties (the “Existing Creditors”); Premier’s approximately US$400million of letters of credit will be refinanced; Existing Creditors will also receive shares in the Combined Group
  • The Combined Group’s Board of directors will comprise 11 directors including six independent non-executive directors and three executive directors including Linda Z. Cook (currently CEO of Harbour) who will be CEO of the Combined Group and Phil Kirk (currently CEO of Chrysaor) who will be President of the Combined Group and CEO Europe; the two other non-executive directors will be appointed by Harbour
  • The Transaction is subject to regulatory approvals and approval by Premier’s shareholders and the Existing Creditors
Rationale and benefits of the Transaction

The Boards of Directors of Premier and Harbour believe the Transaction will:
  • Bring together two complementary businesses to create the largest London-listed independent oil and gas company by production and reserves
Combined production as at 30 June 2020 of over 250 kboepd and combined 2P reserves of 717 mmboe as at 31 December 2019
Combined 2020 H1 revenue of US$1.76 billion and H1 EBITDAX of US$1.27 billion
Competitive operating costs of US$10.5/boe in H1 2020
Sector leading strategies to reduce the carbon footprint of their operations
  • Result in a Combined Group with significant scale and diversification, through the combination of material operated and non-operated cash generative production hubs in the UK North Sea
  • Create a business with a stable platform for future growth and the ability to fund and realise value from its development portfolio and international exploration projects
  • Transform Premier’s financial position, delivering a Combined Group with a strong and sustainable financing structure with resilience to compete in a lower commodity price environment; anticipated combined accounting net debt (excluding Letters of Credit) of approximately US$3.2 billion on completion
  • Create substantial cost and tax synergies, accelerating the use of Premier’s c. US$4.1 billion of UK tax losses and unlocking significant value for shareholders
  • Create a combined business with the potential to offer a meaningful dividend for shareholders over time
Conditions to closing

The Transaction is subject, amongst other things, to regulatory, shareholder and Existing Creditors’ approval.

Since the Transaction constitutes a reverse takeover for the purposes of the Listing Rules, Premier will need to seek shareholder approval and re-admission of its ordinary shares upon completion to the Official List of the FCA and to trading on the main market of the London Stock Exchange. Premier will in due course send a prospectus and circular to its shareholders convening a general meeting to approve the Transaction.

Premier’s Board intends to provide its unanimous and unconditional recommendation to Premier’s shareholders to vote in favour of the Transaction, as the Premier directors intend to do in respect of their own beneficial holdings of Premier’s shares, representing approximately 0.12 per cent of the existing share capital of Premier as at 5 October 2020, being the last practicable date prior to publication of this announcement.

Roy Franklin, Chairman of Premier, commented:

“The Board intends to recommend unanimously this transaction to shareholders as being in the best interests of shareholders and the company. This will mark a new and exciting chapter in Premier’s history.”

Tony Durrant, CEO of Premier, commented:

“There is significant industrial, commercial and financial logic to creating an independent oil and gas company of this size with a leading position in the UK North Sea. The transaction will also provide the Combined Group with a solid foundation from which to pursue a fully funded international growth strategy.”

Linda Cook, CEO of Harbour, commented:

“This transaction is the next step in Harbour’s aspiration to develop a new independent E&P company with global relevance. It significantly advances our leading position in the North Sea, where we will continue to re-invest, and expands our geographic footprint to Asia and Latin America. We are excited by the Premier assets in these regions and view them as the foundations upon which to build material portfolios and further diversify the company.”

Phil Kirk, CEO of Chrysaor, commented:

“Through this deal we will become the UK’s largest London-listed independent E&P, by all key metrics. With our combined organisation and operatorship of a large part of our now international portfolio, we will have the ability to deliver value safely, and play our part in the energy transition.”
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Re: Mergers and Acquisitions

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Chevron Completes Acquisition of Noble Energy

SAN RAMON, Calif., October 5, 2020 — Chevron Corporation (NYSE: CVX) announced today that its acquisition of Noble Energy, Inc. (NASDAQ: NBL) has been completed following approval by Noble Energy shareholders.

“We are pleased to welcome Noble Energy’s employees and shareholders to Chevron. Noble’s high-quality assets complement Chevron’s advantaged upstream portfolio, and the combination is expected to deliver strong financial benefits,” said Chevron Chairman and CEO Michael Wirth. “With an industry-leading balance sheet and a track record of capital discipline, we believe we’re in a different place than others and can protect the dividend while driving long-term value.”
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Re: Mergers and Acquisitions

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Chevron Corporation, the multinational energy firm, said Monday it had entered into a definitive agreement with Noble Energy, Inc. to buy all of the outstanding shares of the Houston, Texas-based oil and gas explorer, in an all-stock transaction valued at $5 billion, or $10.38 per share.

The deal was first reported by the Wall Street Journal on Monday. Based on Chevron’s closing price on July 17, 2020, and under the terms of the agreement, Noble Energy shareholders will receive 0.1191 shares of Chevron for each Noble Energy share. The total value of the deal, including debt, is $13 billion, Chevron said. The price of the deal represents a 7.6 percent premium to Noble’s closing price on Friday of $9.65.

The acquisition makes it the largest tie-up in the oil industry since the start of the coronavirus pandemic that triggered a plunge in prices in the industry, the Wall Street Journal said.

The acquisition of Noble Energy provides Chevron with “low-cost, proved reserves and attractive undeveloped resources that will enhance an already advantaged upstream portfolio,” Chevron said in the statement. “Noble Energy brings low-capital, cash-generating offshore assets in Israel, strengthening Chevron’s position in the Eastern Mediterranean.”

The deal will also enhance Chevron’s position in the US.
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Re: Mergers and Acquisitions

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Pioneer Natural Resources to Buy Parsley Energy for $4.5 Billion

Pioneer Natural Resources Co has agreed to buy Parsley Energy Inc. for $4.5 billion, the latest in a flurry of U.S. oil tie-ups as companies seek to weather low prices brought about by the coronavirus pandemic.

The all-stock deal, which values Parsley at a 7.9% premium to its closing value Monday, would solidify Pioneer’s place as one of the largest producers in the Permian Basin of Texas and New Mexico, the top American oil field.

The long-anticipated string of transactions is expected to continue for healthier companies in the country’s most prolific oil fields, investors said, while many smaller, debt-burdened companies that are hoping for a deal may draw few offers.

Pioneer Chief Executive Scott Sheffield said in an interview Tuesday that size and scale would be key to surviving as an independent oil-and-gas producer as the world moves away from fossil fuels, and would help his company return more cash to shareholders. But he said additional combinations of industry players may take time.

“I do not see much more coming until these other companies can deliver with excess cash flow over the next two or three years,” he said.

The Wall Street Journal reported Monday that Pioneer and Parsley were in talks to combine. Shares in Parsley increased about 5% on Tuesday, as Pioneer’s stock fell around 4%.

“The combination of Parsley and Pioneer creates an organization set to thrive as we forge a strong new link at the low end of the global cost curve,” Parsley Chief Executive Matt Gallagher said in a statement. He is poised to join the combined company’s board of directors

The deal comes a day after ConocoPhillips agreed to buy Concho Resources Inc. for $9.7 billion. Last month, Devon Energy Corp. agreed to a $2.6 billion merger with WPX Energy Inc., while Chevron Corp. in July agreed to buy Noble Energy Inc. for about $5 billion. All of them were all-stock deals with premiums of 15% or below.

The targets are among a relatively small group of U.S. oil-and-gas companies considered healthy enough financially to attract buyers, investors said.

Only about a quarter of major U.S. shale operators were attractive acquisition or merger targets based on their financial and operational strength, the Deloitte consulting firm said in a recent report. Less-attractive possibilities made up about half of the sector and a significant portion of U.S. oil and gas production. Deloitte deemed the rest as either risky investments or attractive largely to private-equity firms.
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Re: Mergers and Acquisitions

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Cenovus and Husky Combine to Create a Resilient Integrated Energy Leader
Oct 25, 2020 6:30 ET

Combination of complementary businesses will result in $1.2 billion in cost and capital synergies, enhance free funds flow generation and support investment grade credit profile

CALGARY, Alberta, Oct. 25, 2020 (GLOBE NEWSWIRE) -- Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) and Husky Energy Inc. (TSX: HSE) today announced a transaction to create a new integrated Canadian oil and natural gas company with an advantaged upstream and downstream portfolio that is expected to provide enhanced free funds flow generation and superior return opportunities for investors.

The companies have entered into a definitive arrangement agreement under which Cenovus and Husky will combine in an all-stock transaction valued at $23.6 billion, inclusive of debt. The combined company will operate as Cenovus Energy Inc. and remain headquartered in Calgary, Alberta. The transaction has been unanimously approved by the Boards of Directors of Cenovus and Husky and is expected to close in the first quarter of 2021.

Transaction highlights:
  • Accretive to all shareholders on cash flow and free funds flow per share
  • Anticipated annual run rate synergies of $1.2 billion, largely achieved within the first year, independent of commodity prices
  • Expected free funds flow break-even at West Texas Intermediate (WTI) pricing of US$36 per barrel (bbl) in 2021, and at less than WTI US$33/bbl by 2023
  • Low exposure to Western Canadian Select (WCS) locational differential risk while maintaining healthy exposure to global commodity prices
  • Increased and more stable cash flows support investment grade credit profile
  • Net-debt-to-adjusted-EBITDA ratio of less than 2x expected to be achieved in 2022
  • Anticipated quarterly dividend of $0.0175 per share (upon Board approval) and positioned for consistent growth
  • Husky shareholders will receive 0.7845 of a Cenovus share plus 0.0651 of a Cenovus share purchase warrant in exchange for each Husky common share
Highly Complementary Integrated Portfolio

The combination has low exposure to Alberta oil pricing while maintaining healthy exposure to global commodity prices. It will unlock market opportunities by uniting high-quality and low-cost oil sands and heavy oil assets with extensive midstream and downstream infrastructure, creating a global competitor able to optimize margin capture across the heavy oil value chain.

“We will be a leaner, stronger and more integrated company, exceptionally well-suited to weather the current environment and be a strong Canadian energy leader in the years ahead,” said Alex Pourbaix, Cenovus President and Chief Executive Officer. “The diverse portfolio will enable us to deliver stable cash flow through price cycles, while focusing capital on the highest-return assets and opportunities. The combined company will also have an efficient cost structure and ample liquidity. All of this supports strong credit metrics, accelerated deleveraging and an enhanced ability for return of capital to shareholders.”

The combined company will be the third largest Canadian oil and natural gas producer, based on total company production, with about 750,000 barrels of oil equivalent per day (BOE/d) of low-cost oil and natural gas production, including 50,000 BOE/d of high free funds flow generating offshore Asia Pacific production. It will be the second largest Canadian-based refiner and upgrader, with total North American upgrading and refining capacity of approximately 660,000 barrels per day (bbls/d), which includes approximately 350,000 bbls/d of heavy oil conversion capacity. The company will have access to about 265,000 bbls/d of current takeaway capacity out of Alberta on existing major pipelines, as well as about 305,000 bbls/d of committed capacity on planned pipelines. In addition, it will have 16 million barrels of crude oil storage capacity as well as strategic crude-by-rail assets that provide takeaway optionality.

Rob Peabody, Husky President and Chief Executive Officer, said, “Bringing our talented people and complementary assets together will enable us to deliver the full potential of this resilient new company. The integration of Cenovus’s best-in-class in situ oil sands assets with Husky’s extensive North American upgrading, refining and transportation network and high netback offshore natural gas production, will create a low-cost competitor and support long-term value creation.”

The transaction will result in processing capacity and egress out of Alberta for the majority of the combined company’s oil sands and heavy oil production. The company will have opportunities for margin enhancement through strategically located upstream assets integrated with the upgrading complex at Lloydminster, Saskatchewan, large U.S. refining assets in PADD 2 and PADD 3, and storage and blending operations at Hardisty, Alberta. The integration of Cenovus’s upstream assets with Husky’s downstream and midstream portfolio will also shorten the future value chain and reduce condensate costs associated with heavy oil transportation. Cash flow stability is further underpinned by the global exposure of Husky’s offshore Asia Pacific natural gas production interests, which currently generate approximately $1 billion in annual free funds flow through sales largely under long-term contracts.

Strategic and Financial Benefits of the Combination

Cenovus and Husky combined are expected to be stronger, more competitive, efficient and profitable than either company on its own.

Immediate and tangible savings and improved capital allocation opportunities

The combined company is expected to generate an incremental $1.2 billion of annual free funds flow, comprised of $600 million in annual corporate and operating synergies and $600 million in annual capital allocation synergies, achievable independent of commodity prices. These synergies are the product of a rigorous and disciplined evaluation process conducted by Cenovus and Husky over the past months to identify the specific efficiencies that can be gained through this transaction. The vast majority of the annual savings are anticipated to be achieved in the first year of combined operations, with the full amount of the annual run rate synergies realized within year two. The companies anticipate additional future savings based on opportunities for further physical integration of the upstream and downstream heavy oil assets.

The anticipated $600 million in annual corporate and operating cost synergies will be achieved through reductions to combined workforce and corporate overhead costs including streamlined IT systems and procurement savings through economies of scale. Immediate efficiencies are also expected to be realized by implementing best practices from each company, including applying Cenovus’s operating expertise to Husky’s oil sands assets, leveraging the increased portfolio’s scale in the Deep Basin, and pursuing commercial and contract-related efficiencies on midstream marketing and blending opportunities.

The expanded portfolio will enable more efficient, returns-focused capital allocation. The company is expected to sustain production levels and downstream operations with an anticipated annual capital investment of $2.4 billion, a reduction of more than $600 million per year compared with what would be required by the two companies on a standalone basis. The estimated proved reserves life of about 33 years, consisting mostly of very low-cost reserves, is expected to result in reduced re-investment risk and eliminate the need for future large-scale capital projects to sustain production at current levels.

Enhanced free funds flow generation and investment grade metrics

The combined company is expected to be free funds flow breakeven in 2021 at WTI prices of US$36/bbl, with a line of sight to reducing its free funds flow breakeven to less than WTI US$33/bbl by 2023. This is lower than either company on a standalone basis.

The company’s priority will be to maximize free funds flow by focusing investments on sustaining capital expenditures. In the current environment, free funds flow generation will position the combined company to achieve a net-debt-to-adjusted-EBITDA target of less than 2x in 2022, without the need for asset dispositions. Along with the combined entity’s lower free funds flow breakeven threshold, the combined company will offer an accelerated deleveraging capability relative to either company on a standalone basis.

The funds flow profile of the combined company supports investment grade credit metrics and a lower cost of capital through the commodity price cycle. At closing, the combined company is expected to have ample liquidity with $8.5 billion in undrawn committed credit facilities and no bond maturities until 2022.

After achieving its balance sheet objectives, the company expects to generate sufficient free funds flow to be able to consider sustainable growth in shareholder distributions and a returns-focused organic capital investment program with residual free funds flow. Following the close of the transaction, Cenovus is anticipating the Board’s approval of a quarterly dividend of $0.0175 per share.

Uncompromising Commitment to Safety and Sustainability Leadership

The commitments both Cenovus and Husky have made to world-class safety performance and environmental, social and governance (ESG) leadership will remain core to the combined company. This includes ambitious ESG targets, robust management systems and transparent performance reporting. The company will continue working to earn its position as a global energy supplier of choice by advancing clean technology and reducing emissions intensity. This includes maintaining the ambition established by each company independently of achieving net zero emissions by 2050. Cenovus will also make it a priority to continue building upon the strong local community relationships already established by both companies, with a focus on Indigenous economic reconciliation.

The targets Cenovus and Husky released earlier this year for their key ESG focus areas are the products of robust processes to ensure alignment with the companies’ business plans and strategies. Cenovus remains committed to pursuing ESG targets and will undertake a similarly thorough analysis before setting meaningful targets for the new portfolio. Once that work is complete in 2021 and approved by the Board, the new targets and plans to achieve them will be disclosed. Leading safety practices, strong governance and advancing diversity and inclusion will remain central to the company’s ESG commitments.

Management and Board Leadership – Committed to Successful Integration

The combined company will be led by a proven management team reflecting the strengths of both organizations, with a track record of strong safety performance, operational excellence and cost and capital discipline, along with downstream and midstream expertise. Alex Pourbaix will serve as Chief Executive Officer of the combined company, Jeff Hart will serve as Chief Financial Officer, Jon McKenzie will serve as the Chief Operating Officer and Keith MacPhail will serve as independent Board Chair.

Additional senior executives for the combined company will be selected from top talent at both companies and named by the close of the transaction.

The management team will be complemented by a Board of Directors consisting of eight directors identified by Cenovus and four directors identified by Husky.

Transaction Details and Governance

Under the terms of the definitive agreement, Husky shareholders will receive 0.7845 of a Cenovus share plus 0.0651 of a Cenovus share purchase warrant in exchange for each Husky common share. This represents a 21% premium, excluding warrants, relative to Husky’s five-day volume-weighted average price per share as at October 23, 2020. Including the warrants, the premium is 23%. While the transaction was originally conceived as an at-market merger, resulting in a negotiated proportionate ownership level, the respective share values have diverged during the due diligence period over the past months. This resulted in a premium for Husky shareholders based on the current share prices.

Each whole warrant will entitle the holder to acquire one Cenovus common share for a period of five years following the completion of the transaction at an exercise price of $6.54 per share. Assuming the full exercise of such warrants, the combined company would receive approximately $428 million in cash proceeds. The aggregate consideration package for Husky shareholders implies a transaction equity value for Husky of approximately $3.8 billion, and a transaction enterprise value for Husky of approximately $10.2 billion.

The transaction is structured through a plan of arrangement in respect of the securities of Husky under the Business Corporations Act (Alberta), and is subject to the approval of at least two-thirds of the votes cast by holders of Husky common shares. Hutchison Whampoa Europe Investments S.à r.l., which holds 40.19% of the Husky common shares and L.F. Investments S.à r.l., which holds 29.32% of the Husky common shares, have each entered into a separate irrevocable voting support agreement with Cenovus pursuant to which each has committed to vote all of its Husky common shares, representing, in total, approximately 70% of the Husky common shares, in favour of the transaction at the special meeting of Husky shareholders. In addition, Husky will also seek the approval of at least two-thirds of the votes cast by holders of outstanding Husky preferred shares voting together as a single class. If Husky preferred shareholder approval is obtained, each Husky preferred share will be exchanged for one Cenovus preferred share with substantially the same commercial terms and conditions as the Husky preferred shares. The transaction is not conditional on Husky preferred shareholder approval and, if not obtained, the Husky preferred shares will remain outstanding in a subsidiary of the combined company.

The issuance of Cenovus common shares, warrants exercisable for Cenovus common shares and, if applicable, Cenovus preferred shares pursuant to the transaction is subject to the approval by a majority of the votes cast by holders of Cenovus common shares at a special meeting of Cenovus shareholders.

Immediately following the close of the transaction, and prior to the exercise of any warrants issued to Husky shareholders as part of this transaction, Cenovus shareholders will own approximately 61% of the combined company, and Husky shareholders will own approximately 39%. Immediately following the close of the transaction, Hutchison Whampoa Europe Investments S.à r.l. and L.F. Investments S.à r.l. will respectively hold approximately 15.7% and 11.5% of the combined company.

“Cenovus is pleased to have Husky’s significant shareholders, with their strong ties to Canada, exceptional business capabilities and knowledge of Asia and Husky’s Asian assets in particular, become one of our long-term shareholders,” said Pourbaix. “We value the perspectives they will provide as highly successful international investors.”

In addition to the voting support agreements, Hutchison Whampoa Europe Investments S.à r.l. and L.F. Investments S.à r.l. have also each entered into a separate standstill agreement with Cenovus, taking effect at closing, under which they will each be subject to certain voting requirements, transfer restrictions and other standstill restrictions for a maximum term of five years following completion of the transaction. All other shareholders holding 5% or more of the combined company at closing of the transaction that do not have existing similar rights, will also be provided with customary registration and pre-emptive rights upon request.

The Board of Directors of each of Cenovus and Husky have unanimously approved the arrangement agreement and support the transaction. Details of the transaction will be included in a joint information circular that Cenovus and Husky expect to mail to their respective shareholders by mid-November. The special shareholder meetings of both companies are expected to be held in December.

In addition to shareholder approvals, the transaction is subject to regulatory approvals, as well as the approval of the Court of Queen’s Bench of Alberta.

The transaction is expected to close in the first quarter of 2021.
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Re: Mergers and Acquisitions

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OMV and Mubadala complete Borealis transaction
  • OMV acquires additional 39% stake from Mubadala, increasing its shareholding in Borealis to 75%
  • Purchase price of USD 4.68 bn
  • Net cash out for OMV is EUR 3.8 bn
  • Mubadala retains a 25% interest in Borealis
OMV, the international integrated oil and gas company headquartered in Vienna and Mubadala Investment Company, the Abu Dhabi-based strategic investment company, have today completed the transaction for OMV to acquire an additional 39% stake in Borealis, a leading, global chemicals company, from Mubadala.

Following the initial agreement announced in March this year, the transaction was completed in line with the expected timeline and in accordance with all regulatory requirements. OMV now holds a 75% interest in Borealis and Mubadala retains a 25% interest in the company.

OMV is entitled to all dividends in relation to the additional shares in Borealis distributed after December 31, 2019. OMV will fully consolidate the results of Borealis in its financial statements. In 2019, Borealis generated total sales of EUR 9.8 bn and a net profit of EUR 872 mn. The operating cash flow of Borealis – including dividends from its joint venture Borouge –amounted to EUR 1.5 bn in 2019. In the first nine months of 2020, Borealis achieved an operating cash flow including Borouge dividends of EUR 1.1 bn, 6 percent higher than the same period of last year, despite the difficult market environment due to the COVID-19 pandemic.

Musabbeh Al Kaabi, CEO, Petroleum & Petrochemicals, Mubadala Investment Company: “This transaction is well aligned with our strategy as a responsible investor and we are confident in the value this partnership will create for all three companies. Both OMV and Borealis are champions of the Mubadala portfolio, and this decision is consistent with our asset management model and our commitment to partner with like-minded players.”

Rainer Seele, Chairman of the OMV Executive Board and CEO: “This transaction is another milestone in the implementation of our strategy. We are thus establishing an integrated and sustainable business model extending OMV’s value chain towards higher value chemical products and recycling, thereby repositioning the Group for a lower carbon future.”

The purchase price of the transaction amounts to USD 4.68 bn. Based on closing adjustments, the cash-out for OMV, net of cash acquired, is EUR 3.8 bn. The adjustments include the first quarter dividends to which OMV is entitled based on the increased shareholding, currency effects, and the cash position of Borealis at closing. Following the successful issuance of senior and hybrid bonds of EUR 4.5 bn Euros, OMV paid the entire amount in full at closing. As a result of the synergies identified in the last few months, OMV is increasing the synergy potential from EUR 700 mn to more than EUR 800 mn. In addition, OMV has successfully started its divestment program, which will realize EUR 2 bn by the end of 2021. The sale of the 51-percent share in OMV’s gas logistics subsidiary Gas Connect Austria has already been signed and will have a deleveraging effect of EUR 570 million for OMV.

With its head office in Vienna, Borealis currently has more than 6,800 employees and operates in over 120 countries. The company provides services and products to customers globally, both directly and in collaboration with Borouge, a joint venture with the Abu Dhabi National Oil Company (ADNOC) and with Baystar™, a joint venture with Total in Texas, USA.

Global demand for monomers and polymers is growing rapidly. The purchase of a controlling majority in Borealis makes OMV a leading provider of polyolefins and base chemicals. The joint production capacities make OMV and Borealis the number one producer of ethylene and propylene in Europe and one of the top 10 polyolefin producers worldwide. The acquisition is a strategic extension of OMV’s value chain into high value chemicals. This provides a natural hedge against the cyclicality of each value chain step with respect to both volumes and market spreads, de-risking OMV’s exposure to volatile markets.

Furthermore, OMV and Borealis will jointly expand their know-how and activities in the plastics circular economy. Borealis’ activities in plastics recycling, through its subsidiaries EcoPlast (Austria) and mtm plastics (Germany), Project STOP (Ocean Waste) and the Design For Recycling (DFR) initiative are a perfect addition to OMV’s ReOil® technology for the chemical recycling of post-consumer-plastic. The proprietary ReOil® technology converts hard-to-recycle plastic waste into high-quality feedstock for its refineries, substituting the need crude oil.

Background information:

OMV Aktiengesellschaft

OMV produces and markets oil and gas, innovative energy and high-end petrochemical solutions – in a responsible way. With Group sales of EUR 23 bn and a workforce of around 20,000 employees in 2019, OMV Aktiengesellschaft is one of Austria’s largest listed industrial companies. In Upstream, OMV has a strong base in Central and Eastern Europe as well as a balanced international portfolio, with Middle East & Africa, the North Sea, Russia and Asia-Pacific as further core regions. Daily average production was 487,000 boe/d in 2019. In Downstream, OMV operates three refineries in Europe and owns a 15% share in ADNOC Refining and Trading JV, with a total annual processing capacity of 24.9 mn tons. Furthermore, OMV has a 75% participation in Borealis, one of the world’s leading producers of polyolefins. The Company operates about 2,100 filling stations in ten European countries. OMV runs gas storage facilities in Austria and Germany. In 2019, gas sales volumes amounted to around 137 TWh. Sustainability is an integral part of OMV’s corporate strategy. OMV supports the transition to a lower-carbon economy and has set measurable targets for reducing carbon intensity and introducing new energy and petrochemical solutions.

About Mubadala Investment Company

Mubadala Investment Company is a sovereign investor managing a global portfolio, aimed at generating sustainable financial returns for the Government of Abu Dhabi. Mubadala’s $232 billion (AED 853 billion) portfolio spans six continents with interests in multiple sectors and asset classes. We leverage our deep sectoral expertise and long-standing partnerships to actively source deals. In the UAE, we are driving sustainable growth by optimizing scale and efficiency, supporting the continued diversification and global integration of the local economy while growing our shareholder value. Headquartered in Abu Dhabi, Mubadala has offices in London, Rio de Janeiro, Moscow, New York, San Francisco and Beijing.
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