Abu Dhabi’s Mubadala Investment Company is exploring options for Nova Chemicals, a Canadian plastics maker that could be valued at $10 billion or more.
The sovereign wealth fund is working with financial advisers as it weighs what to do with the asset, including selling a stake to a Canadian pension fund or another company in the industry.
No final decisions have been made and Mubadala may still decide to keep its holding in Nova. Abu Dhabi, like many of the governments in the region, is seeking funds to diversify its economy away from oil.
While large oil producers have shifted in and out of chemical manufacturing over the years, the current trend is to create huge integrated players. Concerns about the rise of electric vehicles and green energy are spurring the move back into chemicals to take advantage of ongoing growth in demand for oil-and-gas derived plastics.
Abu Dhabi National Oil Company (ADNOC), the Emirate’s state-owned oil company, has been looking at ways to add petrochemical operations. The company this month signed an agreement with Austria’s OMV to cooperate on projects that combine the firms’ chemical and refinery expertise.
ADNOC and Mubadala are also discussing more ways to work together, the wealth fund’s deputy chief executive officer said this month.
In contrast to China and Saudi Arabia, Abu Dhabi has so far stalled on consolidating its petrochemical and plastics assets. China is in the midst of merging Sinochem Group with China National Chemical, similarly Saudi Aramco last week agreed to buy a majority stake in fellow state-owned chemical maker SABIC.
Source: Islamic Business and Finance