Abu Dhabi National Oil Company (ADNOC) and German chemical giant Covestro have reached an agreement for ADNOC to acquire all issued shares of Covestro (ticker) at €62 per share, valuing the company's equity at approximately €11.7 billion. Covestro announced this agreement on October 1.
As part of the deal, Covestro will issue new shares to receive a €1.2 billion capital injection from ADNOC to further its growth strategy. Covestro's supervisory and management boards support ADNOC's offer, stating it benefits the company, its employees, shareholders, and stakeholders. The current management team will remain post-transaction.
The agreement follows over a year of negotiations, with ADNOC initially offering €55 per share in June 2023. In October, Covestro agreed to engage in open discussions regarding the potential acquisition.
ADNOC's final offer of €62 per share represents a 54% premium compared to Covestro's stock price a year ago. As of October 1, Covestro’s stock closed at €58.06, a 3.79% increase.
Originally Bayer Group’s material science division, Covestro became an independent entity and listed on the stock market in 2015. It specializes in polyurethane and polycarbonate materials, coatings, adhesives, and specialty chemicals. By the end of 2023, Covestro operated 48 production sites globally with approximately 17,500 employees. In 2023, Covestro reported €14.4 billion in sales and €1.1 billion in EBITDA, a 33.2% year-over-year decline.
This acquisition marks ADNOC's largest deal since its founding in 1971. ADNOC holds confirmed oil reserves of 137.9 billion barrels, ranking fourth globally. In November 2022, ADNOC's board approved a five-year capital expenditure plan worth $150 billion to diversify its operations.
ADNOC’s downstream executive director, Khaled Salmeen, highlighted that the acquisition is a significant step in transforming ADNOC into a top-tier global chemical company.
