Austria-based Borealis has announced that it has received a binding offer from the Czech group Agrofert to purchase its fertiliser, melamine and technical nitrogen business. It is the second such offer this year; the company previously rejected a binding offer made by Russia’s Eurochem on 2 February following the outbreak of the Ukraine war. The present offer values the business on an enterprise value basis at EUR 810 million.
Borealis has long sought to divest itself of this part of its operations, prompted in part by the company’s goal to pursue a more circular economy as the path towards a climate-neutral society. Achieving zero emissions in the fertiliser business will require new solutions and considerable investment. As Thomas Gangl, CEO of Borealis, previously pointed out, by selling the fertiliser business, the company would be able to reduce its CO2 footprint by more than 50%. Following the divestment, Borealis will therefore continue to focus on its core activities of providing innovative and sustainable solutions in the fields of polyolefins and base chemicals.
The Agrofert group is active in a number of industries in the countries of Central Europe, with activities spanning from chemicals and agriculture to food production. Generating a consolidated turnover of EUR 7.5 billion in 2021, the group comprises more than 200 companies and employs approximately 31.000 people.
As one of the leading European nitrogen fertiliser producers, Agrofert has manufacturing facilities in Germany, the Czech Republic, and Slovakia. With the acquisition of Borealis’ production assets in Austria, Germany and France as well as a comprehensive sales and distribution network utilising the Danube River, the group is now further expanding these capabilities across the continent.
Borealis will initiate mandatory information and consultation procedures with employee representatives shortly. The transaction is also subject to certain closing conditions and regulatory approvals, with closing expected for the second half of 2022.