UAE’s ADNOC to Acquire Covestro in $16 Billion Chemicals Deal
ADNOC to diversify its portfolio with Covestro acquisition, marking a major move in the global chemicals industry
UAE’s ADNOC Agrees to Acquire German Chemicals Firm Covestro for $16.3 Billion
Abu Dhabi oil major ADNOC has agreed to buy German chemical company Covestro for $16.3 billion (14.7 billion euros), including debt, after a year of negotiations, the German group said on Tuesday.
ADNOC will offer a takeover price of $68.86 (€62.00) per Covestro share, which the chemical company will accept.
“Subject to the review of the offer document, the management board and the supervisory board are expected to recommend the company’s shareholders to accept the offer,” Covestro stated.
The purchase price reflects a premium of almost 54% over the unaffected closing price on June 19, 2023, the day before any media coverage of the proposed sale. This amounts to an equity value of nearly $13 billion (€11.7 billion) for Covestro.
According to Covestro, the offer is subject to standard closing requirements, such as merger control, foreign investment control, and permits from EU foreign grants. It also has a minimum acceptance of 50% and one share.
This would be the first time a Gulf state-owned corporation has purchased an interest in Germany’s DAX 40 blue-chip index, and it would rank among the largest cash purchases in the chemicals industry ever.
In order to diversify its downstream portfolio, ADNOC, which pumps nearly all of its oil in the United Arab Emirates (UAE), the primary producer of OPEC, is looking to purchase chemicals and petrochemicals.
ADNOC first approached Covestro a year ago.
In June 2024, ADNOC’s years-long bid to acquire Covestro moved a step closer to a successful conclusion after Covestro said it had decided to “enter into definitive discussions with ADNOC”.
Sultan Ahmed Al Jaber, ADNOC Managing Director and Group Chief Executive Officer, said of the strategic agreement announced today.
“This strategic partnership is a natural fit and aligns seamlessly with ADNOC’s ongoing smart growth and future-proofing strategy and our vision to become a top 5 global chemical company.”
