Abu Dhabi National Oil Co.’s new $2.1 billion offer to acquire a major stake in Latin America’s leading petrochemicals company underscores the push by Middle Eastern oil producers to diversify away from crude.
Adnoc is offering 37.29 reais ($7.61) a share to buy most of the 38.3% stake in Brazil’s Braskem SA held by troubled industrial conglomerate Novonor SA, according to a statement Thursday. Braskem rose as much as 23% in Sao Paulo on the news before trimming gains.
Adnoc’s offer is the latest in a bidding war that has also included Unipar Carbocloro SA and J&F Investimentos SA. Novonor trying to sell the stake to appease its creditors, a stop-and-start process that has dragged on for years. In May, Adnoc made a joint bid with Apollo Global Management Inc. to buy all of Braskem’s shares, people familiar said at the time. Now Adnoc is bidding without the New York-based buyout giant.
State-owned oil producers in the Middle East are expanding in chemicals, an industry poised for long-term growth even as demand for crude is expected to decline amid the energy transition. Adnoc is said to be putting the final touches on a deal with Austria’s OMV AG to create a petrochemical firm worth more than $32 billion, while Saudi Arabia is planning an $11 billion petrochemical complex with France’s TotalEnergies SE.
Read more: Adnoc, OMV Move Closer to Forming €30 Billion Chemical Giant (1)
Braskem is the top maker of thermoplastic resins in the Americas, and a leading global producer in terms of capacity. Demand for plastics, paints and car parts made from the petrochemicals that Braskem produces is expected to increase in the region, and its facilities in Brazil and other countries can be built out if consumption grows.
Adnoc is informally proposing to share control with Brazilian oil giant Petroleo Brasileiro SA, the way Novonor currently does, said a person familiar to the matter.
Petrobras, the second-biggest shareholder after Novonor, is studying Adnoc’s offer and considering whether to exercise its preferential rights to buy part or all of the stake being sold, it said in a statement.
Half of Adnoc’s purchase would be made in cash and the rest with a payment-in-kind bond that would mature in seven years, with a coupon of 7.25% a year, according to the Braskem statement. The first coupon payment would come in four years, with all of the principal being paid after seven.
--With assistance from Vinícius Andrade and Dinesh Nair.
(Updates with details on Adnoc offer in sixth paragraph)
Author: Mariana Durao, Cristiane Lucchesi and Peter Millard
