4. OMV and ADNOC to Establish a New Polyolefins Joint Venture

Description of the Transaction

On March 3, 2025, OMV and ADNOC signed a binding agreement for the combination of their shareholdings in Borealis and Borouge into Borouge Group International. ADNOC has also entered in a share purchase agreement with Nova Chemicals Holding GmbH, an indirectly wholly owned company of Mubadala Investment Company P.J.S.C., for 100% of Nova Chemicals for an enterprise value of USD 13.4 bn. ADNOC and OMV have agreed that upon completion of the combination, Borouge Group International will acquire Nova Chemicals, further expanding its footprint in North America. The Nova Chemicals transaction will be funded through acquisition debt, which is expected to be refinanced in the capital markets.

OMV and ADNOC will have equal shareholdings in Borouge Group International upon closing, including a cash injection of EUR 1.6 bn (reduced by dividends paid out until closing) by OMV into the new company. Borouge Group International will be listed in Abu Dhabi Securities Exchange (ADX) and offer a share exchange to Borouge’s PLC free float shareholders. The new entity will be headquartered and domiciled in Austria, with regional headquarters to be established in Abu Dhabi. It is further intended that Borouge Group International will have as well a listing on the Vienna Stock Exchange (VSE) in the future. The equal shareholding structure enables joint control between OMV and ADNOC, allowing both parties to have equal decision-making rights in all strategic matters.

As part of the preparations for the formation of the polyolefins joint venture between OMV and ADNOC, Borealis’ 40% participation in Borouge 4 LLC (Borouge 4), including associated shareholder loans and financial guarantees, was transferred to OMV subsidiaries (30%) and to ADNOC’s subsidiary MPP Holdings GmbHRenamed to XRG Austria GmbH in January 2026 (10%) on October 24, 2025. The transaction did not have a material impact on the consolidated income statement. The cash proceeds related to the associated shareholder loans amounted to EUR 158 mn and are reported in the line “Cash inflows in relation to non-current assets and financial assets” in the Consolidated Statement of Cash Flows. Once fully operational, Borouge 4 is envisaged to be retransferred to Borouge Group International AG. When combined, the three highly complementary businesses will create the fourth-largest global polyolefins group.

The combination of Borouge and Borealis and the acquisition of Nova Chemicals will be closed simultaneously, with expected completion in Q1 2026 subject to regulatory approvals and other customary conditions.

Reclassification to Held for Sale and Discontinued Operations

Based on the signed agreement, OMV is expected to lose control over Borealis Group (excluding the Borouge investments) leading to deconsolidation after closing of the transaction. Consequently, on March 3, 2025, Borealis Group (excluding the Borouge investments) was reclassified to “held for sale” according to IFRS 5 (later referred to as Borealis disposal group). Since reclassification, the non-current assets are no longer depreciated or amortized, and investments are no longer accounted for according to the equity method in line with IFRS 5 requirements. Applying the measurement principles of IFRS 5 did not lead to a remeasurement of Borealis disposal group. For an overview of the Borealis disposal group “held for sale” balances as of December 31, 2025, see Note 5 – Assets and Liabilities Held for Sale.

Borealis disposal group represents a separate major line of business of OMV in the Chemicals segment and is therefore reported as a discontinued operation. The prior year statement of comprehensive income has been restated to present the discontinued operations separately from the continuing operations.

OMV entities will continue to purchase goods from and sell goods to the discontinued operations. The intra-group transactions are fully eliminated on Group level. For more details on material eliminated intercompany charges, see section “Additional disclosures related to discontinued operations.”

The Borouge investments are currently jointly controlled by OMV and ADNOC and will continue to be jointly controlled after the closing of the transaction. OMV’s stake in the Borouge investments will increase following the transaction, as the shares in Borouge will be indirectly held via Borouge Group International AG. They, therefore, continue to be accounted for according to the equity method.

Borouge Group International AG and some entities of Borealis Group are members of the Austrian Tax Group and will continue to be part of the Austrian Tax Group after closing of the transaction via joint tax grouping (Beteiligungsgemeinschaft). This joint tax group will be formed by the Austrian shareholders of Borouge Group International AG, and the proportional share of taxable result of the joint tax group will be attributable to the Austrian Tax Group. The expected partial disposal of Borealis Group from the Austrian Tax Group triggered the reassessment of the net deferred tax asset position (DTA) of the Austrian Tax Group in OMV Aktiengesellschaft. As a consequence, at the reclassification date, the DTA of the Austrian Tax Group decreased by EUR 129 mn. The impact of the reassessment is presented in the line “Taxes on income and profit” in the Consolidated Income Statement.

Restatement

Prior year periods have been adjusted accordingly in order to comply with the requirements of IFRS 5.34 to reflect comparative information for discontinued operations. The tables below depict the financial information as reported in 2024 and restated:

Impact on Primary Financial Statements

Impact on Segment Reporting

Additional Disclosures Related to Discontinued Operations

Income Statement and Other Comprehensive Income from Discontinued Operations

Moreover, the following material intercompany transactions, which have been eliminated, were reported between Borealis disposal group and OMV’s continuing operations:

Sales revenues to continuing operations were mainly related to the sale of chemical products, which were predominantly sold to OMV’s Chemicals sites in Schwechat (Austria) and Burghausen (Germany) for production. These sales revenues were eliminated before reclassification to “Net income from discontinued operations.” The gross margin related to them is reflected in “Net income from discontinued operations.” The before mentioned sales contracts will stay effective after closing of the transaction.

Purchases from continuing operations were mainly related to the sale of feedstock (base chemicals) from OMV’s refinery sites in Schwechat (Austria) and Burghausen (Germany). These sales revenues from OMV’s continuing operations to Borealis were eliminated and are therefore not included in the line “Sales revenues” in the Consolidated Income Statement. The gross margin related to them is reflected in “Net income from continuing operations.” In the table “Net income from discontinued operations” those purchases from OMV’s continuing operations are reflected in the line “Other operating expenses.” The before mentioned sales contracts will stay effective after closing of the transaction.

The current income tax charges to the Borealis disposal group for members of the Austrian tax group were pooled with the tax result of the other members of the Austrian tax group in OMV Aktiengesellschaft. These income taxes were eliminated prior to reclassification to “Net income from discontinued operations” and are therefore not included in the line “Taxes on income and profit” in the table “Net income from discontinued operations.”

For a detailed overview regarding eliminations of intercompany transactions related to discontinued operations, see the tables below:

The cumulative income (net of tax) recognized in other comprehensive income and included in equity amounted to EUR 47 mn for the Borealis disposal group as of December 31, 2025.

Other Disclosures Related to Discontinued Operations

Cash Flows

Further details on Cash Flows attributable to discontinued operations can be found in the Consolidated Statement of Cash Flows.

Credit Risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Borealis disposal group is exposed to credit risk from its operating (primarily trade receivables) and financing activities, including deposits with banks and financial institutions and other financial instruments. For further details on related balance sheet items, see Note 5 – Assets and Liabilities Held for Sale.

Credit risk exists also in relation to the financial guarantee contracts issued by Borealis to Bayport Polymers LLC, with a maximum exposure based on drawdowns of financing arrangements as of December 31, 2025, of EUR 1,387 mn plus interest (2024: EUR 727 mn plus interest). Details on guarantees provided by Borealis are further described in Note 35 – Related Parties.

Liquidity Risk

Borealis actively manages liquidity risk to mitigate the risk of encountering difficulties in meeting the obligation associated with financial liabilities. Liquidity is managed on a daily basis to ensure the Borealis Group’s liquidity requirements are met at all times and covered with the lowest possible level of working capital.

Market Risk

Borealis is exposed to certain commodity price risks relating to its business operations, which it manages using derivative instruments (Level 2 of Fair Value Hierarchy).

For petrochemical production, some of the forecasted cracker feedstock purchases and finished product sales are hedged through refined oil product swaps. Cash flow hedge accounting is applied to these derivatives, except for the derivatives that are used to limit the price risk on the inventory held for immediate consumption. Contracts not designated as cash flow hedges are classified as fair value through profit or loss and stated at fair value.

In addition, Borealis hedges its forecasted electricity purchases using electricity swaps. For these derivatives, cash flow hedge accounting is applied.

Foreign Currency Risk

Borealis incurs foreign currency risks on sales, purchases, and borrowings that are denominated in currencies other than EUR. The most significant exposures exist for USD and SEK, which are partially hedged using currency derivatives (Level 2 of Fair Value Hierarchy). Borealis hedges forecasted positions denominated in foreign currencies using FX forwards and swaps. Borealis classifies its foreign exchange forward contracts as cash flow hedges and states them at fair value through other comprehensive income.

Additionally, translation risk arises on the consolidation of subsidiaries, associated companies, and joint ventures with functional currencies different from EUR. Foreign exchange translation differences relating to these net investments, except net investments in Borouge, are recognized in other comprehensive income from discontinued operations.

Borealis has hedged part of its investment in a joint venture that has USD as its functional currency by designating certain external loans in USD as hedges of the Group’s investments in its foreign operations. The hedged risk in the net investment hedge is the risk of a weakening USD against the EUR that would result in a reduction in the carrying amount of the Group’s net investment in the joint venture in USD. The EUR/USD impact on the measurement of the loans is recognized in other comprehensive income from discontinued operations.

Contingent Assets

On July 11, 2025, Borealis GmbH filed a lawsuit against Clariant, Orbia, Celanese, Westlake, and its affiliates with the court of Amsterdam, the Netherlands, for the damages caused by the fact that the defendants set up an ethylene purchasing cartel. At the reporting date, Borealis Group has a contingent asset arising from this lawsuit. As the outcome and financial effect remain uncertain, no asset has been recognized in accordance with IAS 37. The estimated financial effect is still subject to ongoing assessment and cannot be reliably measured at this stage.