December 5, 2024 – Adnoc Makes Significant Stride in Global Chemical Industry with Covestro Acquisition
In a groundbreaking move, the Arabian Petroleum Company (Adnoc) has announced the successful acquisition of a majority stake in German polymer giant Covestro, marking a pivotal step towards joining the ranks of the world’s top chemical alliances. By the end of the initial acceptance period on November 27, Adnoc surpassed the minimum threshold stipulated in the voluntary public tender offer, amassing approximately 69.94% of Covestro’s shares.
The boards of directors and supervisory board of Covestro have jointly issued a reasoned statement, recommending shareholders to accept the offer. Shareholders who have not yet submitted their shares have an additional acceptance period until December 16, 2024, to do so. Adnoc plans to announce the final results of the offer on December 19, following the conclusion of this extended period. The completion of the offer remains subject to various regulatory conditions, including merger control and foreign investment approvals, with the transaction expected to be finalized in the second half of 2025.
According to industry sources, Adnoc’s newly established investment company, XRG, is poised to become one of the world’s top five chemical companies following this acquisition. The deal, valued at a staggering €11.6 billion, represents not only a significant milestone in Adnoc’s international growth strategy but also marks the first major acquisition of a DAX company by a Gulf state investor and the largest transaction in the European chemical industry in recent years.
For Adnoc, the acquisition grants access to Covestro’s advanced materials technology in electric vehicles, thermal insulation, and technical plastics. In return, Covestro will play a central role in Adnoc’s expansion into plastics and specialty chemicals. Covestro’s CEO, Markus Steilemann, highlighted that Adnoc’s partnership will bring both capital and expertise, providing robust support irrespective of economic conditions.
Adnoc’s ambitions extend beyond Covestro, with XRG set to invest in other chemical operations and hydrogen projects, aiming to rank among the world’s largest five chemical companies. Negotiations are underway with Austrian oil company OMV for the restructuring of its base and specialty chemicals division, and Adnoc has already secured a majority stake in fertilizer company Fertiglobe. These moves underscore Adnoc’s far-reaching aspirations in the chemical sector.
For Covestro employees, the acquisition brings positive prospects. Adnoc has committed to maintaining Covestro’s status as a German joint-stock company with shared decision-making powers and adhering to German corporate governance principles until December 31, 2028. The Covestro board will remain in place, with Adnoc securing seats on the supervisory board, and no plans for relocating factories or headquarters.
The Adnoc-Covestro deal signifies more than just a strategic investment; it heralds a significant shift in the global chemical industry landscape. As the transaction progresses towards completion, it sets the stage for a more diversified and competitive era in the global chemicals sector.