Abu Dhabi’s ADNOC to acquire German chemicals firm Covestro for $16.4 billion

Abu Dhabi’s ADNOC to acquire German chemicals firm Covestro for .4 billion


Covestro’s headquarters in Leverkusen, Germany. The company has adjusted its full year guidance for 2022, citing a number of factors.

Ina Fassbender | AFP | Getty Images

Abu Dhabi’s state-owned oil firm ADNOC on Tuesday said it has agreed to buy German chemicals firm Covestro for 14.7 billion euros ($16.4 billion).

ADNOC, short for the Abu Dhabi National Oil Company, will launch a 62 euros-per-share voluntary public takeover that implies an equity value for Covestro of around 11.7 billion euros and represents a premium of around 54% to Covestro’s closing price on June 19, Covestro said in a statement.

Covestro shares were trading 3.7% higher as of 9:26 a.m. London time.

The deal represents an enterprise value of 14.7 billion euros, ADNOC said in a separate statement. It added that the transaction is key for the firm’s international growth strategy of becoming a top-five chemicals player.

“As a global leader and industrial pioneer in chemicals, Covestro brings unmatched expertise in high-tech specialty chemicals and materials, using advanced technologies including AI,” said Sultan Ahmed al-Jaber, group CEO and managing director of ADNOC.

Covestro, a former unit of Bayer, manufactures polymer materials for construction and engineering processes. Its products are used in sectors such as sports, telecommunications, as well as in the chemical industry.

As part of the deal, ADNOC also signed an investment agreement in which it pledged to provide additional funding by buying 1.17 billion euros worth of new shares of Covestro from a capital increase.

The German materials giant opened its books to ADNOC in June, following reports of takeover interest. ADNOC has been looking to increase its footprint in the chemicals sector as it seeks to diversify its portfolio.

Earlier this year the UAE oil giant closed a deal acquiring a 24.9% stake in Austrian chemicals firm OMV. At the end of 2023, ADNOC also became a majority shareholder in ammonia producer Fertiglobe after agreeing to buy OCI’s stake in Fertiglobe for $3.62 billion.

Analysts at Jefferies said in a Tuesday note that they expect limited antitrust and regulatory risk from the deal, given the “limited operational overlap.8

Covestro said that its management and supervisory board assume they will recommend the transaction to the firm’s shareholders, subject to an offer review.



Source

Trump announces trade deal with South Korea, setting tariffs at 15%
World

Trump announces trade deal with South Korea, setting tariffs at 15%

File photo: US President Donald Trump gestures during a joint press conference in South Korea. Afp Contributor | Afp | Getty Images U.S. President Donald Trump on Wednesday announced that Washington had reached a “Full and Complete” trade deal with Seoul, setting blanket tariffs on the country’s exports to U.S. at 15%. This deal means […]

Read More
Qualcomm beats on earnings, highlights growth in Meta smartglasses
World

Qualcomm beats on earnings, highlights growth in Meta smartglasses

Cristiano Amon, CEO & President, Qualcomm, on Centre Stage during day one of Web Summit 2024 at the MEO Arena in Lisbon, Portugal. Shauna Clinton | Sportsfile | Getty Images Qualcomm reported fiscal third-quarter earnings on Wednesday that beat Wall Street expectations and provided a stronger-than-expected guide for the current quarter. Qualcomm shares slid in […]

Read More
Trump ends de minimis exemption for global low-cost goods
World

Trump ends de minimis exemption for global low-cost goods

A U.S. postal worker delivers Amazon boxes outside of the New York Stock Exchange on Oct. 11, 2018. Spencer Platt | Getty Images President Donald Trump on Wednesday signed an executive order ending the de minimis trade loophole for low-value packages shipped from all countries. The order, which takes effect Aug. 29, will subject any […]

Read More