UAE's ADNOC Seeks EU Nod Under Foreign Subsidies Rules for Covestro Deal

Abu Dhabi state oil giant ADNOC last Thursday sought EU approval under the bloc's foreign subsidies rules for its 14.7-billion-euro acquisition of German chemicals company Covestro, according to a filing on the European Commission site.

ADNOC, which last week won the green light under EU merger rules for the deal, is making its biggest ever acquisition, underscoring Middle East countries' diversification of their investments to reduce their dependence on oil.

The EU's Foreign Subsidies Regulation (FSR) takes aim at unfair foreign aid for companies with the goal of reining in competition from non-EU companies subsidised by their governments.

The European Commission, which acts as the antitrust regulator for the 27-country bloc, set a June 24 deadline for its decision.

It can open a full-scale investigation after 25 working days if it has serious concerns. Such a so-called in-depth probe would take 90 working days, which can be extended by 3 weeks if companies offer remedies to address concerns.

Last year, a bid by UAE telecoms group e& for parts of Czech telecoms company PPF's assets was only cleared after it offered to remove an unlimited state guarantee and agreed not to provide foreign subsidies to the merged entity.

The case was the first full-scale probe under the FSR.