INTERNEWSTIMES.COM – Abu Dhabi’s state-owned oil firm ADNOC is making a major move in the global chemicals market, agreeing to acquire German chemicals firm Covestro for a whopping $16.4 billion. This acquisition marks a significant step in ADNOC’s ambitious strategy to diversify its portfolio and become a top-five player in the chemicals industry.
The deal, which involves a 62 euros-per-share voluntary public takeover, represents a premium of around 54% to Covestro’s closing price on June 19. It also sets a new benchmark for strategic partnerships between Middle Eastern investors and German companies, with analysts calling it “unprecedented” in its scale and scope.
Covestro, a former unit of Bayer, is a leading manufacturer of polymer materials used in a wide range of sectors, including construction, engineering, sports, and telecommunications. ADNOC’s acquisition of Covestro is expected to significantly expand its presence in the global chemicals market, adding to its recent investments in Austrian chemicals firm OMV and ammonia producer Fertiglobe.
The deal highlights ADNOC’s commitment to becoming a major player in the chemicals industry, a sector that is experiencing significant growth and consolidation. This acquisition is expected to provide ADNOC with access to new technologies and markets, while also strengthening its position in the global supply chain.
Covestro’s management and supervisory board are expected to recommend the transaction to shareholders, subject to an offer review. Analysts believe that the deal faces limited antitrust and regulatory risk due to the limited operational overlap between ADNOC and Covestro.
The acquisition is expected to be completed in the coming months, subject to regulatory approvals and shareholder consent. (Red)
