Vienna-based Borealis AG on July 5 completed the sale of its nitrogen business – which includes fertilizer, melamine, and technical nitrogen products – to the Czech Republic’s chemicals and fertilizer group Agrofert. Borealis said the transaction valued the business on an enterprise basis of €810 million (approximately $880.7 million at current exchange rates).
Borealis received a binding offer from Agrofert last June for the acquisition of its nitrogen business (GM June 3, 2022) after it had pulled out of an earlier agreement to sell the unit to EuroChem Group AG (GM March 11, 2022).
The decision not to proceed with the EuroChem offer followed Russia’s invasion of Ukraine in February 2022 and the resulting sanctions imposed by the EU on Russia. EuroChem’s offer valued the Borealis Nitrogen business on an enterprise basis of €455 million.
The European Commission on March 13 approved unconditionally Agrofert’s proposed acquisition of the business, concluding that the transaction would raise no competition concerns in the European Economic Area (GM March 17, p. 30).
Prague-based Agrofert is one of the leading European nitrogen fertilizer producers, with production facilities in the Czech Republic, Germany, and Slovakia. It distributes fertilizers in the Czech Republic, Hungary, Slovakia, Croatia, Poland, and Romania. The group also produces and sells AdBlue and various technical nitrogen products.
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 will complement Agrofert’s existing capabilities in serving its customers across Europe, Borealis said in an earlier statement.
“Fertilizer production is one of the key segments of the Agrofert group,” said Agrofert Vice Chairman Petr Cingr. “Our priority now will be to integrate Borealis’ nitrogen business into the Agrofert group that enables us to approximately double our production capacity and, at the same time, to enter new markets, namely France, the Benelux countries, Bulgaria, and Serbia.”
Following the transaction, Borealis CEO Thomas Gangl said Borealis will now continue to focus on its core activities in the fields of polyolefins and base chemicals and on the transformation towards a circular economy. Borealis AG is majority-owned (75%) by Austrian oil and gas company OMV AG.