Austria’s OMV is entering talks with Abu Dhabi National Oil Company (ADNOC Group) about combining some of their assets to create a chemicals and plastics giant.

OMV’s executive board decided to pursue negotiations with state-owned ADNOC about a potential merger of Borouge and Borealis, it said in a statement Friday, confirming a Bloomberg News report. They would combine the operations to become equal partners in a listed entity that will be a global player in the polyolefin market, according to the statement.

Vienna-headquartered Borealis is 75 per cent owned by OMV, with the remainder held by ADNOC. Abu Dhabi-listed Borouge is itself a partnership between ADNOC and Borealis and has a market value of about $22bn.

Bloomberg News reported earlier this month that OMV and ADNOC were discussing the valuation and ownership structure for the potential deal and could reach the broad outlines for formal negotiations in the coming weeks. The combined company could be worth more than $30bn.

The merged entity could provide a platform for further acquisitions, according to Friday’s statement. OMV sees a “strong and compelling industrial logic” in a potential deal, CEO Alfred Stern said in the statement.

Combining the two businesses would let Borealis tap cheap feedstock and new growth markets while bringing Borouge technical expertise, he said. Any deal would be subject to reaching an agreement on the valuations of the various businesses.

The mooted transaction would dovetail with a wider plan by the UAE to attract investment and technology as well as build new industries and manufacturing capabilities. ADNOC has been expanding a refining and chemicals hub in Abu Dhabi to find additional outlets for its oil and natural gas production and make the plastics that go into consumer goods.