Austrian oil and gas company OMV has announced it is negotiating with joint venture partner Mubadala for an additional stake in petrochemicals firm Borealis.

OMV said it intends to buy an additional 39% share for $4.68bn. If completed, OMV’s current shareholding in Borealis would increase from 36% to 75%. UAE-based Mubadala would hold the rest of the equity.

Borealis supplies infrastructure to the oil and gas industry, as well as fertilisers, automotive products and industrial feedstocks, among others. The purchase would enable OMV to expand its market value chain in the petrochemical sector.

Borealis was formed in 1994. In an interim financial report covering the six months to June 2019, it made net sales of $4.89bn (€4.28bn). Net profit over the same period was $6.03m (€528m).

The deal would also allow the company to fully consolidate the results of the petrochemicals producer in its financial statements.

OMV said the deal is subject to a definitive agreement with Mubadala, merger control clearances, and other approvals from the relevant authorities.

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By GlobalData

The company said in its announcement that its supervisory board has not made its final deliberations on the deal. However, its said the board is likely to make a decision “as soon as possible”.

In October last year, OMV Norge drilled appraisal well 6506/11-11 S about 20km west of the Åsgard field in the Norwegian Sea, confirming the discovery of the 6506/11-10 (Iris) gas/condensate.

In the same year, Mubadala Petroleum agreed to farm out interests in each two Indonesian fields to UK’s Premier Oil.