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interface news reporter | zhuang jian

abu dhabi national oil company (adnoc) has reached an acquisition agreement with german chemical giant covestro. adnoc will acquire all issued shares of covestro at a price of 62 euros per share, corresponding to a total equity value of approximately 11.7 billion. euro (approximately 90.8 billion yuan). covestro announced the above information on october 1, local time.

as part of the transaction, covestro will also receive a capital injection of approximately 1.2 billion euros (approximately 9.3 billion yuan) from adnoc through the issuance of new shares to promote the further implementation of the company’s growth strategy.

covestro said that the company’s supervisory board and board of directors welcomed and supported the acquisition offer announced by adnoc after full consideration. covestro ceo shi lewen said that the agreement with adnoc is in the best interests of covestro, its employees, shareholders and all stakeholders. the latest investment agreement signed makes it clear that covestro’s management team will remain in place after the transaction is completed.

the two companies had been negotiating for more than a year before reaching the acquisition agreement.

in june 2023, adnoc made a preliminary informal offer of 55 euros per share to covestro. covestro issued a statement three months later saying it decided to initiate open discussions on a potential acquisition proposed by adnoc., the two companies agreed to discuss potential transactions and possible investmentsthe agreement will be negotiated in detail.

adnoc for covestrothe final trading price of 62 euros per share was higher than that of more than a year ago.begcovestro's share price was about 54% higher before the acquisition news was announced. as of the close of trading on october 1, covestro's share price was 58.06 euros, up 3.79% that day.

covestro was formerly the materials science department of germany's bayer group. in 2015, it was spun off from the group and listed independently. plastic materials such as polyurethane and polycarbonate, coatings, adhesives and specialty chemicals are its main products.

as of the end of 2023, covestro has 48 production bases around the world and approximately 17,500 employees. in the ranking of the world's 50 largest chemical companies released by the us "chemical and engineering news" last year, covestro ranked 25th.

in 2023, covestro’s sales revenue will be 14.4 billion euros(approximately 111.9 billion yuan), earnings before interest, taxes, depreciation and amortization (ebitda) 1.1 billion euros(approximately 8.5 billion yuan), a year-on-year decrease of 33.2%.

the acquisition of covestro will be adnoc’s largest merger and acquisition transaction since its establishment in 1971. adnoc is a state-owned oil company wholly owned by the uae government. it has proven oil reserves of 137.9 billion barrels, ranking fourth in the world.

in november 2022, a board meeting chaired by uae president mohamed bin zayed approved a five-year us$150 billion (approximately 1.05 trillion yuan) capital expenditure plan aimed at transforming adnoc from a traditional of the state-owned oil company into an international energy company with diversified businesses.

khaled salmeen, executive director of adnoc's downstream business, said that the acquisition of covestro is a large-scale transaction and an important change that will become part of adnoc's future business.

“we are working hard to create a global company that can be among the top five in the chemical industry, with economies of scale and growingchangpingthe capability of the platform is very important. "salmeen said.