UAE’s state-owned oil giant, ADNOC, is set to make a formal offer for German polyurethane producer Covestro, in a deal valued at €14.4 billion ($16 billion), marking Europe’s biggest takeover of the year.
After more than a year of negotiations, ADNOC is expected to submit a formal offer of around €14.4 billion, including debt, according to the UK’s Financial Times, citing two sources familiar with the matter.
The report also noted that ADNOC CEO Sultan Al Jaber visited Germany in August to finalise the terms of the deal. Earlier in June, Covestro confirmed that discussions began with an indicative offer price of €62 per share from ADNOC. This followed an earlier $12.7 billion bid by the UAE firm.
Covestro, originally the plastics division of pharmaceutical giant Bayer, was listed publicly in 2015. It produces key materials like foam chemicals used in mattresses, car seats, and building insulation.
An insider involved in the deal highlighted that Covestro’s focus on foam materials positions the company at the heart of a global energy transition trend.
A successful deal would give ADNOC access to a global network—Covestro’s 17,500 employees are spread across Europe, the US, and Asia, with less than a third of its production based in Germany—along with “an ideal customer base.”
Covestro’s shares have remained below ADNOC’s expected offer price for the past six years, during which the chemicals industry faced fluctuating market cycles, as competitors launched massive new plants and cut prices to capture market share.
Covestro’s key products include MDI and TDI, two chemicals essential for producing different types of polyurethane foam, and polycarbonate, a durable yet transparent plastic initially popular in CDs and DVDs, now used in automotive components like headlights, sunroofs, and electric vehicle interiors.
While many of Covestro’s chemicals are petroleum-based, the company is actively exploring alternatives, including plant-based materials, waste recycling, and more sustainable production methods.
If successful, the deal would mark one of the largest cash transactions in the chemical industry and the first time a DAX 40 company has been acquired by a Gulf state.
