UAE’s ADNOC Begins Takeover of Covestro AG

Abu Dhabi’s ADNOC has issued a takeover offer to the shareholders of German chemicals maker Covestro AG for the acquisition of all outstanding shares of Covestro, following approval by the German Federal Financial Supervisory Authority.

On 1 October, the Abu Dhabi energy company struck a deal to buy Covestro for 14.7 billion euros, including debt.

Covestro shareholders can accept the takeover offer by tendering their shares at an offer price of 62 euros in cash per Covestro share, which represents a premium of about 54% to the unaffected closing share price of Covestro on 19 June 2023, “the day prior to first market rumours regarding a potential transaction”, ADNOC International Germany Holding AG, a subsidiary, said.

The offer ends on 27 November 2024.

The takeover offer is subject to a minimum acceptance threshold of 50% plus one share of the company’s issued share capital, and other regulatory conditions being met.

ADNOC would also buy 1.17 billion euros worth of new Covestro shares from a 10% capital increase to improve funding.

Covestro is the former plastics-making business of pharmaceutical giant Bayer, which took it public in 2015. Its main products include foam chemicals used in mattresses, car seats and insulation for buildings.