ADNOC Drop Plans to Acquire Brazil’s Braskem

State-owned Abu Dhabi National Company (ADNOC), which has been buying several assets in the oil and gas sector across the world, has shelved its plans to acquire Braskem, a state-owned petrochemicals company based in Brazil.

According to the selling shareholder Novonor, ADNOC has withdrawn its offer to acquire a $2.1 billion stake.

In a statement, Novonor said that with reference to the negotiations with ADNOC International Limited on a potential transaction involving the transfer of shares held by NSP Investimentos S.A. – Em Recuperação Judicial (NSP), controlled by Novonor S.A. – Em Recuperação Judicial (“Novonor”), issued by Braskem S.A.

“We have been informed by ADNOC that they have no interest in continuing the process of analysis and negotiations with Novonor on the potential transaction. Novonor remains fully engaged in the process, in line with its commitment to its related parties,” the statement added.

It may be recalled that ADNOC has submitted a $2.1 billion non-binding offer in November last year to acquire the Brazilian conglomerate Novoner’s 38.3% stake in Braskem. Its bid represented a premium of more than 100% over Braskem’s closing share price at the time the bid was made, according to Reuters.

Another Offer

Braskem had also reportedly received a joint $7.6 billion offer earlier from ADNOC and Apollo Investments for a stake. In March, an unnamed new bidder also entered the race for the shares.

Braskem, which has a 36.1% stake in Braskem, has preferential rights to buy the stake, which it is ready to exercise after completing due diligence if it has to, CEO Jean Paul Prates told Bloomberg separately. Other companies are also conducting due diligence, Prates said, without disclosing any names.

The acquisition was one of several ADNOC has been looking at as part of a push into the chemicals sector and away from oil, including the acquisition of German chemicals group Covestro, which has also stalled and could see the company submit a higher bid.

ADNOC initially offered Covestro $64.55 per share in December last, valuing the company at $12.22 billion. While talks are still underway, ADNOC has reportedly appointed a consulting firm to help it garner information to improve the bid, though there appear to be no clear estimates as to the value of the increased bid.