Adnoc Said to Seal €12 Billion Deal for Chemical Firm Covestro

Abu Dhabi National Oil Co. has reached a deal to buy chemical producer Covestro AG for about €11.7 billion ($13 billion), in what’s set to be the biggest Middle Eastern acquisition of a European firm, people familiar with the matter said.

(Bloomberg) — Abu Dhabi National Oil Co. has reached a deal to buy chemical producer Covestro AG for about €11.7 billion ($13 billion), in what’s set to be the biggest Middle Eastern acquisition of a European firm, people familiar with the matter said. 

State-owned Adnoc is set to formally announce its bid of €62 per Covestro share on Tuesday, the people said. The company has received necessary signoffs from senior Abu Dhabi officials to proceed with its offer for Covestro, according to the people, who asked not to be identified because the information is private.

Adnoc had largely completed its due diligence by late August, people with knowledge of the matter said at the time. The price represents about an 11% premium to Monday’s closing price as well as a 54% premium to Covestro’s closing price on June 19, 2023, the last full trading day before Bloomberg News revealed Adnoc’s initial approach.

Adnoc Chief Executive Officer Sultan Al Jaber has been scouring the world for deals, picking up stakes in gas projects in the US and Mozambique in recent months. Chemicals are a big part of that push, as the company sees growth in products used to make goods such as plastics continuing to rise over the coming decades, while the energy transition is likely to slow oil demand. 

A deal is coming more than a year after talks first started, with Adnoc already bumping several times from its first proposal of €55 per share, Bloomberg News has reported. Deliberations are ongoing and timing of the deal could change, the people said.

A representative for Adnoc didn’t immediately respond to queries, while a spokesperson for Covestro had no immediate comment. 

—With assistance from Anthony Di Paola.