UAE's ADNOC seals $16B deal to buy German chemical firm Covestro
The deal is set to be the largest takeover ever by a Middle Eastern company of a European firm.
Abu Dhabi National Oil Company (ADNOC) announced Tuesday it will buy German chemical producer Covestro AG for around 14.7 billion euros ($16.3 billion), in what is due to be the biggest Middle Eastern acquisition ever of a European firm.
The United Arab Emirates, whose government owns and runs ADNOC, is seeking to reduce its dependence on oil amid the climate transition to cleaner energy. As a result, ADNOC has heavily invested in cleaner fuels such as gas and petrochemicals, expanding downstream and refining operations.
Covestro makes plastics and chemicals for automotive, construction and engineering sectors. Following the announcement of the ADNOC acquisition, shares spiked in the company by 3.7% to a three-year high of 58 euros ($64.18).
The deal, which values Covestro at 62 euros ($68.60) per share, will see ADNOC take on around 3 billion euros in debt and the Gulf energy major will also buy 1.17 billion euros worth of new Covestro shares when the deal closes.
