Polyolefins and fertilizers major Borealis AG, Vienna, said it has received a binding offer from the Czech Republic’s chemicals and fertilizer company Agrofert for the acquisition of its Nitrogen business, which includes fertilizer, melamine, and technical nitrogen products.
The offer values the business on an enterprise value basis at €810 million (approximately $867 million at current exchange rates). Subject to certain closing conditions and regulatory approvals, transaction closing is expected in the second half of 2022.
Borealis in March pulled out of an earlier agreement to sell the unit to EuroChem Group AG following Russia’s invasion of Ukraine and the imposition of sanctions against Russia (GM March 11, p. 30). The two had been in exclusive negotiations following the receipt in early February of a binding offer for the Nitrogen business from EuroChem (GM Feb. 4, p. 1).
The EuroChem offer valued the Borealis Nitrogen business on an enterprise value basis at €455 million.
Prague-based Agrofert is active in a number of industries in Central Europe, from chemicals and agriculture to food production. The company is also one of the leading European nitrogen fertilizer producers, with manufacturing facilities in the Czech Republic, Germany, and Slovakia. It generated a consolidated turnover of €7.5 billion in 2021.
By adding Borealis’ production assets in Austria, Germany, and France, as well as a comprehensive sales and distribution network utilizing the Danube River, this business combination would well complement Agrofert’s existing capabilities in serving its customers across Europe, Borealis said in a statement late June 2.
Borealis, which is majority-owned (75%) by Austrian oil and gas company OMV AG, will now initiate mandatory information and consultation procedures with employee representatives.