UAE’s state-run energy firm Adnoc is reportedly weighing an IPO for its recently set up USD 80 bn renewables and chemicals arm XRG on an international exchange, Reuters reported last Friday, citing sources with knowledge of the matter.

Adnoc has been churning out IPOs for its subsidiaries since late 2017, starting with its fuel retail arm’s USD 851 mn ADX debut. Since 2021, it has taken Adnoc Drilling, Fertiglobe, Adnoc Gas, Adnoc Logistics & Services, and Borouge to the ADX, in some of the country’s largest IPOs. Combined together, the offerings drummed up more capital than Saudi Aramco’s record-breaking Tadawul IPO in 2019, excluding the USD 12 bn it raised in a follow-on offering last year, according to Reuters calculations.

Adnoc founded XRG in November 2024 with the aim of investing in lower-carbon energy and chemicals as part of a broader plan to diversify the company’s portfolio and reduce its reliance on oil revenue. The energy giant is prepping XRG to become one of the world’s top five chemical producers and capture 70% of global demand by 2050. Its portfolio already includes a majority stake in Germany’s Covestro and Borouge International. XRG’s board includes former BP chief Bernard Looney, Blackstone President and COO Jon Gray, and Egyptian bn’aire Nassef Sawiris.

Timeline + listing venues: The minority stake sale is expected to materialize in about five years with New York and London among the potential listing venues, the people said. The move could make XRG one of the largest publicly traded energy firms in the world, according to the newswire. The London Stock Exchange (LSE) — home to stocks of major oil and gas players like Shell and BP — is a strong contender for XRG’s potential IPO, one person told Reuters. However, the LSE has seen investors pull funds recently, which could be a drawback. Meanwhile, a listing on the New York Stock Exchange (NYSE) could fetch a higher valuation for XRG, making it a more attractive financial option.

But first… restructuring: Adnoc has yet to name a CEO and complete the transfer of assets to XRG before pursuing a public debut, the people said. The company — set up late last year — is due to become operational this quarter with plans to double its USD 80 bn asset value over the next decade. Just last week, Adnoc announced plans to transfer its stake in Borouge International — a newly-merged polyolefins giant — to XRG, cementing its role as a primary vehicle for the state-run energy firm’s international expansion into the chemicals industry.

ADVISORS- Bank of America is said to be advising on XRG’s strategy.

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