March 19 (Reuters) - Abu Dhabi National Oil Company and

Austria's OMV expect to complete by the end of March a

mega-merger to create a global chemicals giant, the companies

said on Thursday, after years of talks.

The deal, first made public in July 2023, will combine Abu

Dhabi-listed Borouge and Europe's Borealis, alongside the

acquisition of Nova Chemicals from Abu Dhabi wealth fund

Mubadala, to form Borouge Group International, or BGI.

Once the deal is finalised, OMV and ADNOC's international

investment arm, XRG, will jointly own the new entity.

UNDER ATTACK AS IRAN RETALIATES

ADNOC facilities are among those that have come under attack as

Iran retaliated against Israeli attacks on its gas facilities on

Wednesday that marked the biggest escalation of the nearly

three-week U.S.-Israeli war.

A source who asked not to be named said the merger was a

long-term play and was going ahead despite the regional

conflict.

To boost the new company, ADNOC and OMV said they had agreed

to let BGI operate and sell products from Borouge 4, a new

polyolefins plant owned 70% by ADNOC and 30% by OMV. This

arrangement is expected to generate $400 million in cumulative

net profit over the next three years, they said in a statement.

The plant will start operations this quarter, but BGI will

not buy the facility outright from ADNOC and OMV until at least

2029 in an effort to save cash in the near term.

They added they expected the new company to receive strong

investment-grade credit ratings from major agencies.

A planned tender offer to convert existing Borouge shares

into BGI shares is scheduled for 2027. Until then, BGI will

remain privately held and Borouge will remain listed in Abu

Dhabi and pay its planned annual dividend, a commitment BGI will

maintain after the tender offer.