Abu Dhabi’s ADNOC to Acquire Covestro

An investment agreement has been signed by Covestro with certain entities of ADNOC (Abu Dhabi National Oil Company) Group, including ADNOC International Limited (ADNOC International) and its subsidiary, ADNOC International Germany Holding AG (bidder). When this transaction is finalized, two Middle Eastern companies — SABIC and ADNOC — will control a big chunk of engineering thermoplastics. Covestro’s major engineering thermoplastics include Makrolon PC, Apec high-heat PC and Makroblend PC/PBT blends, as well as the Texin and Desmopan family of TPU resins and composites

The signed agreement stipulates, among other items, that the bidder will make a public takeover offer for all outstanding shares of Covestro at a price of €62.00 per share. In addition, ADNOC International is committing itself to fully supporting the company's “Sustainable Future” strategy. At the same time, the board of management and the supervisory board of Covestro decided that upon completion of the transaction, the company's share capital shall be increased by 10% (18.900.000 shares) and that, at and subject to closing, the new shares shall be issued to the bidder against payment of a price per share equal to the offer price, thus, based on an offer price of €62.00 against a total amount of €1.17 billion, under simplified exclusion of subscription rights. Shareholders benefit from a premium of 54% on the unaffected share price, prior to any media coverage of a potential transaction.

Says Covestro’s CEO Dr. Markus Steilemann, “We are convinced that the agreement reached with ADNOC International is in the best interest of Covestro, our employees, our shareholders and all other stakeholders. With ADNOC International’s support, we will have an even stronger foundation for sustainable growth in highly attractive sectors and can make an even greater contribution to the green transformation. We regard ADNOC International as a financially strong and long-term oriented partner with whom we will further drive our successful “Sustainable Future” strategy in all market conditions. Our complementary growth strategies, shared commitment to advanced technologies, innovation and sustainability are key cornerstones of our partnership.”

Partnership enables expansion of Covestro’s position in attractive growth markets. It has a clear growth strategy and is already making progress in its strategic transformation that will further expand its position in attractive growth markets. ADNOC International sees Covestro as the foundational platform of its Performance Materials and Specialty Chemicals business, and says it is convinced of Covestro’s strategic perspective and its vision to become fully circular.

In the joint Investment Agreement, which runs until the end of 2028, Covestro and certain entities of the ADNOC Group, including ADNOC International, have agreed on the main cornerstones of the partnership. In particular, the agreement contains several obligations on the part of ADNOC International to maintain Covestro's existing business activities, corporate governance and organizational business structure. ADNOC International has assured Covestro of its full support for Covestro’s “Sustainable Future” strategy and intends to fully support Covestro in further executing on this strategy

Dr. Sultan Ahmed Al Jaber, ADNOC managing director and group CEO, said: “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. 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 chemicals company. It represents a pivotal step for both organizations and embodies our disciplined approach to investing in strategic assets that drive long-term value and unlock new growth opportunities, while reinforcing our commitment to diversifying ADNOC’s portfolio. Our aligned strategies uniquely position us to meet the growing global demand for energy and chemical products, while accelerating the transition to a circular economy.”

In compliance with the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz, WpÜG), the offer document, which is expected to be available within six weeks, and other information pertaining to the bidder’s public takeover offer will be made available on the following website after approval by BaFin (Bundesanstalt für Finanzdienstleistungsaufsicht) — www.covestro-offer.com.