Germany’s Covestro gives green light for ADNOC takeover
- September 12, 2023
- Posted by: Quatro Strategies
- Categories: Europe, Middle East, Oil & Gas
Covestro, a German plastics and chemicals company, has decided to enter into ongoing discussions with Abu Dhabi National Oil Company (ADNOC) regarding ADNOC’s takeover proposal. This decision follows advice from significant shareholders who believed that formal takeover talks were in the best interest of Covestro’s shareholders.
ADNOC, which is seeking to expand its downstream and renewable energy operations, had made a preliminary offer of 55 euros per share for Covestro in June. However, this offer was initially rejected by Covestro. In August, ADNOC indicated its willingness to raise the offer to 60 euros per share, contingent on Covestro agreeing to formal negotiations.
The potential acquisition of Covestro by ADNOC has raised discussions about the competitiveness of the European chemical industry, which has been facing challenges such as cost inflation and a sluggish economy.
Covestro’s shares responded positively to the news, closing up by 7.8% and reaching their highest levels in about 18 months. The outcome of these discussions between Covestro and ADNOC could have significant implications for both companies and the chemical industry as a whole.
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