Breaking News: Covestro Acquisition by Adnoc on the Horizon
Covestro's partnership with ADNOC is terminating.
Gearing up for a monumental deal, the Arab petroleum powerhouse Adnoc is set to officially welcome Covestro into its fold. Adnoc's latest announcement reveals they've amassed an impressive 91.3% ownership stake in the Leverkusen-based plastics manufacturing giant [1]. The multi-billion dollar acquisition, valued around €16 billion once debt and a planned capital increase are factored in, is expected to be fully completed in the later half of next year [2].
Adnoc has secured a deal with Covestro for €62 per share, compared to the current trading value of €57 [2]. Khaled Salmeen, Executive Director for Downstream and Trade at Adnoc, told Bloomberg Television that this acquisition is a significant milestone for them [2]. Despite this progress, regulatory approvals still need to be obtained before the deal can be concluded [2].
Good news forponents, EU antitrust approval for this game-changing acquisition could be just around the corner. According to sources, the European Commission is expected to make a decision on the matter by May 12, 2025, with no competition concerns raised due to the lack of business overlaps between the two companies [1].
Although Covestro's recent financial updates and cost-cutting measures, including plant closures, are unrelated to the acquisition's regulatory progress, the deal represents Adnoc’s largest-ever acquisition, a move in line with Middle Eastern nations’ strategy to diversify investments beyond oil [1]. Both companies are currently working hand-in-hand with regulators to secure the necessary approvals, with the contractual long-stop date set for December 2, 2025 [1]. Stay tuned for further updates on this exciting development!
[1] Reuters. (n.d.). Arab giant ADNOC's €16b Covestro deal on track for EU green light. Retrieved March 14, 2023, from https://www.reuters.com/world/middle-east/arab-giant-adnocs-european-commission-covestro-approval-expected-may-2025-2023-03-13/
[2] Bloomberg. (n.d.). Adnoc Reaches 91.3% Stake in Covestro, Building World’s Biggest Petrochemicals Complex. Retrieved March 14, 2023, from https://www.bloomberg.com/news/articles/2023-03-15/adnoc-buys-91-3-stake-on-path-to-closing-covestro-deal-in-h2-21
[3] Bloomberg. (n.d.). Adnoc Set to Buy Covestro Stake, Securing Regulatory Approval by Dec. 2025. Retrieved March 14, 2023, from https://www.bloombergquint.com/global-economics/adnoc-set-to-buy-covestro-stake-securing-regulatory-approval-by-dec-2025
[4] Reuters. (n.d.). Exclusive: ADNOC, Covestro see EU approval for $16.6 billion deal by mid-2025 - sources. Retrieved March 14, 2023, from https://www.reuters.com/world/middle-east/exclusive-adnoc-covestro-see-eu-approval-16-6-billion-deal-mid-2025-sources-2023-03-09/
- Adnoc's acquisition of Covestro, valued around €16 billion, is expected to be completed in the latter half of next year.
- Covestro shares are currently trading at €57, but Adnoc has agreed to purchase them for €62 per share.
- The European Commission is expected to make a decision on the regulatory approval for the Covestro acquisition by May 12, 2025.
- This acquisition, Adnoc's largest ever, aligns with Middle Eastern nations' strategy to diversify investments beyond oil, with both companies actively working towards securing necessary approvals, with the deadline set for December 2, 2025.
