Abu Dhabi National Oil Company (ADNOC) has completed its acquisition of German chemicals producer Covestro AG for around €11.7 billion ($13 billion), the largest ever acquisition by a Middle Eastern company of a European entity.
ADNOC and Covestro Deal Announcement
ADNOC and Covestro said the deal would value the German company at €62 per share, but is dependent on the UAE oil company acquiring at least 50% plus one share through the takeover offer. ADNOC will also participate in a capital increase that will give Covestro around €1 billion in fresh cash.
Adnoc largely completed due diligence in late August, people familiar with the matter said at the time. The deal represents an 11% premium to Monday’s close and a 54% premium to Covestro’s closing price on June 19, 2023, the last full trading day before Bloomberg disclosed Adnoc’s initial offer.
ADNOC's global expansion
The deal comes as ADNOC CEO Sultan Al Jaber looks to scoop deals around the world, recently snapping up stakes in gas projects in the United States and Mozambique. Chemicals are a big part of that effort, with the company seeing growth in products used to make plastics continue to rise over the coming decades, while demand for oil is likely to slow amid the energy transition.
The deal comes to a close a year after talks began, with ADNOC raising its offer several times from its initial proposal of 55 euros per share, Bloomberg reported.
