The Abu Dhabi National Oil Company has raised its offer to acquire Covestro to about 11 billion euros ($12.4 billion) as part of its efforts to attract the German chemical producer to enter into negotiations, according to informed sources.
The people, who asked not to be named due to the privacy of the information, explained that ADNOC's new offer valued Covestro shares at about 57 euros, compared to 55 euros in the first informal offer made by the UAE government company. They indicated that ADNOC had expressed confidence in Covestro's strategy and management.
The UAE's ADNOC is negotiating to acquire the German Covestro
Covestro shares rose 3.4% to 49.24 euros at 5:28 pm Tuesday in Frankfurt. Last month, the Leverkusen-based German company rejected ADNOC's previous offer as too low, people familiar with the matter said at the time. Covestro also raised questions about ADNOC's plans for operations related to its specialty.
ADNOC has tried to address Covestro's concerns about its bid, including how the German company's management could help develop specialty chemical processes, according to the people. If negotiations are entered into, there may be scope for ADNOC's bid to be increased.
It should be noted that deliberations are still ongoing, and it is not clear how Covestro will respond to the latest offer. Representatives for ADNOC and Covestro declined to comment.
ADNOC, which produces almost all of the oil in the UAE, plans to invest $150 billion to increase production capacity for crude oil, natural gas and chemicals. It is also in separate talks with Austria's OMV about a possible merger of two petrochemical companies it backs, Borouge and Borealis.
