ADNOC abandons talks to acquire stake in Brazil's Braskem 

Abu Dhabi National Oil Company (ADNOC) has ceased discussions regarding the acquisition of a majority stake in the Brazilian petrochemical company Braskem.  

In November 2023, ADNOC submitted a non-binding offer that valued Braskem's equity at approximately $2.1bn. 

Braskem in a securities filing confirmed that ADNOC has decided not to pursue the potential transaction.  

"We have been informed by ADNOC that they have no interest in continuing the process of analysis and negotiations with Novonor on the potential transaction. Novonor remains fully engaged in the process, in line with its commitment to its related parties," the filing read.  

According to Bloomberg, for years Novonor, which is financially distressed, has been attempting to divest its stake in the petrochemical company. 

Brazil's state-controlled oil company, Petrobras, holding the second-largest stake in Braskem, has also been seeking a new investor to replace Novonor.  

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The demand for products derived from petrochemicals, such as plastics, paints and automotive parts, is anticipated to increase within the region.  

Braskem's production facilities, located in Brazil and other nations, are poised for expansion should the market demand increase. 

ADNOC's interest in Braskem was part of a broader strategy to expand its global chemicals portfolio and reduce its reliance on crude oil and refined products. 

ADNOC is also exploring other significant transactions, including a potential multibillion-dollar deal with German chemical company Covestro and a merger of two of its plastics divisions, which would create a combined entity valued at more than $30bn. 

However, these discussions have also encountered obstacles.  

The proposed merger of ADNOC's Borouge with Borealis has been stalled due to valuation disagreements with Austrian partner OMV, and upcoming elections in Austria might result in further postponements.   

Meanwhile, Covestro remains in ongoing negotiations with ADNOC, which may be holding out for a better offer, the report said.