Covestro AG to Restart Talks with ADNOC on $12 Billion Takeover

The Germany-based Covestro AG has decided, in view of the interest in Covestro expressed by Abu Dhabi National Oil Company (ADNOC), to enter into open-ended discussions with the Abu Dhabi headquartered oil major.

Whether, in which form and, if applicable, at which conditions an agreement between the parties will be reached is open and will depend on the course of the forthcoming discussions. During the discussions, Covestro’s board of management will in particular also address the safeguarding of the further implementation of its future- and sustainability-oriented corporate strategy, including corresponding corporate governance provisions.

Dr Markus Steilemann, Chief Executive Officer of Covestro, said that the interest of ADNOC in their company underlined Covestro’s strong position as one of the world’s leading manufacturers of high-quality polymer materials and as a leader in the shift towards a circular economy.

“Beyond current headwinds in our industry, we are optimally positioned to unlock significant long-term value in highly attractive industries underpinned by strong secular growth trends. Regardless of the talks with ADNOC, we will remain fully focused on pursuing our successful ‘Sustainable Future’ strategy in order to unfold our full potential and further drive the transformation towards the circular economy,” Steilemann added in a statement posted on the company’s website.

Any agreement would, in addition to mutual consent on the commercial and legal transaction parameters, require the approval of the respective boards of the parties and the approval of the competent authorities.

Covestro presently does not intend to comment on this matter any further unless and until changed circumstances or events require publication by Covestro to comply with applicable disclosure rules, the company said.

It may be recalled that the company turned down a proposal until two major investors urged the board to enter formal talks with ADNOC.

ADNOC, which is trying to diversify and develop its downstream and renewable energy operations, made a non-binding offer for Covestro of 55 euros per share in June, which was rejected, according to Reuters.

In August this year, ADNOC indicated to Covestro, which has not commented on the takeover approach, that it could raise its informal offer to $64.41 conditional on the German company entering formal talks, Reuters reported at the time.

That non-binding offer would value Covestro, a maker of chemicals used in insulation, upholstery foams, coatings, and transparent engineering plastics, at about $12.4 billion.

media reports.

About Covestro

Covestro is one of the world’s leading manufacturers of high-quality polymer materials and their components. With its innovative products, processes and methods, the company helps enhance sustainability and the quality of life in many areas.

Covestro supplies customers around the world in key industries such as mobility, building and living, as well as the electrical and electronics sector. In addition, polymers from Covestro are also used in sectors such as sports and leisure, cosmetics, and health, as well as in the chemical industry itself.

The company is committed to becoming fully circular and is striving to become climate neutral by 2035 (scope 1 and 2). Covestro generated sales of $19.32 billion in fiscal 2022. At the end of 2022, the company had 50 production sites worldwide and employed approximately 18,000 people.