ADNOC boosts its Covestro offer to a staggering twelve billion euros
The takeover of German chemical firm Covestro by the Abu Dhabi-based energy conglomerate, ADNOC, seems imminent. ADNOC has upped its bid to a whopping twelve billion Euros and appears to be making strides in this direction. The DAX company is now engaging in serious talks.
The oil conglomerate ADNOC, based in the United Arab Emirates, is poised to purchase the Leverkusen-based chemical company, Covestro.covestro's board has chosen to commence formal negotiations with ADNOC from Abu Dhabi "regarding a potential deal and the signing of an investment agreement," the company announced from Leverkusen. ADNOC has proposed a price of 62 Euros per Covestro share, valuing Covestro at approximately twelve billion Euros. The stocks surged significantly on the stock market and peaked at 54.50 Euros in the DAX, recording a rise of over six percent.
Both parties have been in discussions for months - Covestro made this announcement in September. According to media reports, ADNOC (Abu Dhabi National Oil Company) initially proposed 55 Euros per share, then 57 Euros per share.
The "previously unsuccessful" talks have demonstrated that a mutual understanding on critical elements can be achieved - even considering Covestro's future growth strategy, the company now disclosed. Consequently, the board has decided to engage in formal negotiations. In the event of an agreement, the respective committees of the companies and the relevant antitrust authorities would need to give approval.
As per its own statements, Covestro is one of the leading global manufacturers of plastics. It caters to key industries such as mobility, construction, and housing, as well as electronics and telecommunications. Furthermore, the plastics are utilized in areas such as sports and leisure, health, and within the chemical industry itself.
Covestro generated 14.4 billion Euros in the previous year. It operated at 48 sites worldwide and employed around 17,500 people. The company was spun off from the Bayer group. ADNOC is owned by the state and is one of the largest exporters of crude oil globally.
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The proposed takeover of Covestro, a prominent DAX company and key player in the chemical industry, by ADNOC, which involves takeovers and mergers within the sector, has reached a staggering twelve billion euros due to ADNOC's latest bid increase.
The upcoming merger between Covestro and ADNOC, two significant entities in the chemical industry and the DAX, respectively, could potentially influence the dynamics of takeovers and mergers within the German stock market.
