Value Column by Hans Peter Schupp
26 MARCH 2026
OMV is more than just a beneficiary of high oil prices
Hans Peter Schupp, managing partner of Fidecum AG and Portfolio Manager of the Contrarian Value Euroland Fund (ISIN: LU0370217092), on the portfolio investment in OMV.
The turmoil in the Middle East and on the oil markets is drawing many investors’ attention to companies that stand to benefit from rising oil prices – or at least won’t be adversly affected by them. OMV meets this criterion. For us, however, it is not the core of our investment thesis, but rather an additional factor.
For years, OMV has stood for a combination of energy and chemical businesses with a reliable dividend policy. Stability also stems from the ownership structure: the Republic of Austria holds 31.5% through ÖBAG, and ADNOC from Abu Dhabi holds 24.9%.
The sources of earnings are broader than the label “oil company” suggests. In 2025, just under 60% of operating profit came from Energy, and over 40% from refining, marketing (gas stations), and chemical products. Consequently, the group’s performance depends to a significant extent on the chemical cycle.
A countercyclical strategy in the chemicals sector
To us, that is particularly interesting to us as OMV has acted strategically very straight forward in this segment in recent years. The stake in Borealis, a major European plastics manufacturer, was not expanded during an economic boom, but rather countercyclically, amid the turmoil of the COVID-19 crisis. The deal was agreed upon in March 2020 and closed in October 2020 – since then, OMV has held a 75% stake in Borealis.
The next step now comes amid another challenging environment for the chemical industry. OMV and ADNOC plan to consolidate their plastics units – Borealis and Borouge – into a new group (BGI); they also intend to acquire Nova Chemicals in Canada. The new group is to be listed in Abu Dhabi, with a further listing planned in Vienna. OMV is to hold just under 47%; the transaction is scheduled to close in the first quarter of 2026, subject to regulatory approvals.
OMV and ADNOC estimate BGI’s enterprise value to be in the range of “60+ billion U.S. dollars.” This enterprise value is derived from a multiple of approximately 7.5× EBITDA. How much of this amount will ultimately be returned to shareholders as equity value depends primarily on the new group’s future net debt and on the market valuation following the closing of the transaction.
Our current assessment of OMV
We have calculated the group‘s value under this new structure, focusing on two major, relatively well-defined value components:
(1) OMV’s stake in the future BGI platform, valued at approximately €15–18 billion (after a capital injection and depending on the new group’s debt level), and
(2) the 51% stake in OMV Petrom, with a market value of approximately €6.4 billion,
a combined value in the range of €21.4 to €24.4 billion.
This compares to a market capitalization of approximately €19.3 billion plus a net debt of approximately €4 billion (calculated by us, net debt excluding leases, hybrid capital, and the Petrom adjustment to Petrom’s net cash), thus an enterprise value of approximately €23.3 billion.
Quite obviously, the combined value of the two components alone is close to the EV we calculated. For the remaining OMV activities—Energy/Upstream outside of Petrom, as well as service station and refinery activities outside of BGI – this implicitly leaves a surprisingly low residual value, which could even turn negative. This is rather unusual.
The mystery: why is the residual value so low
At this point, it is worth taking a look at the models used by many analysts. Many of these currently factor in significant discounts when analyzing the two major value drivers. The reason is a cautious short-term outlook: after all, the chemicals sector is indeed facing overcapacity and margin pressure, while price assumptions in the energy segment are very conservative. However, such an approach reflects only the short term and, in our view, is not a viable method for determining sustainable value over the entire cycle. This should fundamentally be based on plausible parameters in the middle of a cycle, not on current data.
We are convinced that, at some point, margins in the chemical and energy sectors will begin to trend back toward mid-cycle levels. When that happens, analysts’ valuation assessments will shift as well: discounts will narrow; and for companies with a strong competitive position, this could even translate into a premium – driven by factors such as economies of scale, cost efficiency, integration, and growth.
The investment idea hinges on three factors: the completion of the BGI transaction, the valuation of the new group, and the normalization of the chemical cycle. In our view, OMV is thus a turnaround project with solid fundamentals. Waiting for the countercyclical strategy in the chemicals segment to bear fruit should be meanwhile sweetend by a substantial dividend yield.
Our investment approach
For 25 years, the Contrarian Value Euroland Fund (ISIN: LU0370217092) has consistently followed the principle of investing in undervalued European companies with solid business models and long-term potential. We act like entrepreneurs who would acquire an entire company – and are prepared to go against market opinion if necessary.
About the author:
Hans Peter Schupp, managing partner of Fidecum AG and portfolio manager of the Contrarian Value Euroland Fund.
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