Covestro and ADNOC-Led XRG Receive Final Approval for €14.7 Billion Acquisition

German chemical manufacturer Covestro AG and Abu Dhabi-based XRG announced on 21 November that they have obtained the final regulatory approval required from Germany’s Federal Ministry for Economic Affairs and Energy.

This clearance satisfies all conditions necessary for the acquisition of Covestro by XRG, formerly ADNOC International, with the transaction expected to be formally completed in the coming days.

The agreement, signed on 1 October 2024, will see the acquirer make a public offer for all issued shares of Covestro for approximately €11.7 billion. The deal also includes the assumption of €3 billion in debt, valuing the entire transaction at €14.7 billion (approximately RMB 114 billion at the time). As part of the arrangement, Covestro will issue new shares equivalent to 10% of its capital to accept a €1.17 billion capital injection from XRG.

In a joint statement, the companies outlined that with the backing of its new long-term strategic shareholder, Covestro will continue its growth trajectory. This will involve a heightened focus on expanding its circular economy initiatives, advancing digital transformation through technologies such as artificial intelligence and quantum computing, and reinforcing its position in high-growth markets including mobility, construction, and electronics.

A central component of the partnership is the designation of Covestro as the core platform for XRG's high-performance materials and specialty chemicals operations.

Under the terms of the investment agreement, Covestro will maintain its operational independence. The company's Board of Management, under the leadership of CEO Dr. Michael Skele-Wright, will continue to be responsible for its operational management and strategic direction.

Post-transaction, Covestro will retain its existing corporate structure, adhere to German corporate governance standards, and honour its current collective bargaining agreements. Its registered headquarters will remain in Leverkusen.

Company Backgrounds:

XRG is an international investment company with an enterprise value of $150 billion, focusing on natural gas, chemicals, and scalable energy solutions for global artificial intelligence and industrial applications. Headquartered in Abu Dhabi, UAE, it is wholly owned by the Abu Dhabi National Oil Company (ADNOC).

Covestro, a Germany-based chemical manufacturer formerly known as the materials science division of Bayer AG, was spun off and listed independently in 2015. The company reported sales of €14.2 billion in 2024, operates 46 production sites worldwide, and employs approximately 17,500 people.