ADNOC Completes $13.3 Billion Takeover of German Plastics Manufacturer Covestro

ADNOC has finalized a landmark deal to acquire Covestro, a leading global chemical company, through a cash takeover offer of Dh254 (62 euros) per share to all Covestro shareholders. The German plastics manufacturer confirmed its acceptance of the offer, which values the company at 12 billion euros ($13.3 billion).

This acquisition marks a significant milestone in ADNOC's international expansion strategy, particularly in its focus on chemicals, gas, LNG, and low-carbon energy sectors. The deal aligns with ADNOC's Board-mandated strategy to grow its presence globally, with the goal of becoming one of the top five chemicals companies worldwide.

Expanding ADNOC’s Chemical Portfolio

Once the transaction is successfully completed, Covestro will serve as the foundation of ADNOC's performance materials and specialty chemicals division. This move is expected to diversify ADNOC's chemical portfolio and support its long-term growth ambitions in the global chemicals market. Covestro's specialty chemicals expertise aligns with ADNOC's vision of sustainable growth and innovation in advanced technologies, such as artificial intelligence (AI).

Dr. Sultan Ahmed Al Jaber, Minister of Industry and Advanced Technology, Managing Director, and CEO of ADNOC, emphasized the strategic nature of the partnership. "Covestro, as a global leader in high-tech specialty chemicals, brings invaluable expertise in advanced materials and AI technologies. This acquisition is a pivotal step in ADNOC’s journey toward becoming a top five global chemicals company," said Al Jaber.

He added, "This strategic partnership will not only deliver long-term value but also reinforce our commitment to diversifying ADNOC’s portfolio through disciplined investment in key assets."

Growing Demand for Chemicals

The global demand for petrochemicals is projected to grow at an average of 2% annually between 2024 and 2050, with the market expected to double by mid-century. Covestro’s portfolio of high-performance materials, used in various sectors from electronics to automotive, positions it as a critical player in meeting this growing demand. Its products, such as films for head-mounted displays and materials for virtual reality devices, highlight Covestro’s role in the integration of AI and digital technologies into everyday life.

Covestro's global reach, particularly in the Asia-Pacific and North American markets, is a key asset for ADNOC as it expands its international presence. With more than half of its revenues generated from these regions, Covestro’s extensive market footprint makes it an attractive investment for ADNOC.

A Shared Vision for Sustainability and Innovation

Covestro CEO Dr. Markus Steilemann expressed confidence in the partnership with ADNOC, stating, "This agreement with ADNOC International is in the best interest of Covestro and all our stakeholders. ADNOC’s financial strength and long-term vision will provide a solid foundation for our sustainable growth in key sectors, enhancing our ability to contribute to the green transformation."

Steilemann also highlighted the complementary growth strategies of both companies, with a shared commitment to sustainability, advanced technologies, and innovation forming the cornerstones of the partnership.

Covestro, headquartered in Germany, is known for its production of polyurethanes, polycarbonates, and performance materials essential for industrial applications. The company’s expertise, coupled with its industry-leading technologies, will further ADNOC’s efforts in expanding its chemical footprint and drive innovation in sustainable materials.

Next Steps

The takeover is subject to a minimum acceptance threshold of 50% plus one share of Covestro’s issued share capital, along with customary regulatory approvals. Once these conditions are met, the acquisition will proceed, positioning ADNOC as a significant player in the global chemicals industry and solidifying its commitment to strategic investments in sustainable, high-growth sectors.

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