Adnoc Intends to Purchase German Plastics Corporation Covestro
The government-run oil firm Adnoc, hailing from the United Arab Emirates, as expected, is about to seize the German plastic giant Covestro. The offer from the Emiratis stands at 62 euros per share of the Leverkusen-based company, as declared by both parties last Tuesday. This sums up the value of Covestro, listed on the DAX, at an astounding 11.7 billion euros.
Covestro boasts a workforce of 17,500 full-time employees, with about 7,000 based in Germany. Besides its Leverkusen headquarters, it has significant sites in Krefeld (Uerdingen), Dormagen (both in North Rhine-Westphalia), and Brunsbüttel (Schleswig-Holstein). Abroad, substantial plants can be found near Houston (USA) and Shanghai (China). The company manufactures both rigid and flexible foam plastics, as well as hard plastics, for industries such as automotive, construction, electronics, and furniture.
Rumors of a prospective takeover started swirling in mid-2023. In September 2023, Covestro openly acknowledged negotiations with Adnoc, albeit, formal talks with the Abu Dhabi company didn't commence until June 2024. Now, a minimum acceptance rate of 50% plus one share is required. Reports suggest that Covestro is backing the offer.
Covesto's potential acquisition by Adnoc could significantly impact its operations in Germany, as the Leverkusen-based company has a large number of employees and prominent sites in the country. Covesto's partnership with Covestro could potentially expand its production capabilities, given Adnoc's resources and expertise in the oil industry.
