ADNOC Amplifies Its Covestro Acquisition Bid to a Whopping €11 Billion
- 21-Jul-2023 12:24 PM
- Journalist: Francis Stokes
UAE: Increasing its offer to purchase Covestro AG, Abu Dhabi National Oil Co. (ADNOC), a well-known energy corporation looking to grow its chemical business through strategic partnerships, has proposed a sizeable sum of Euro 11 billion (USD 12.4 billion).
In comparison to their prior informal offer of about Euro 55, the updated proposal now provides an estimated Euro 57 per share. According to sources, ADNOC is eager to begin talks with the renowned German corporation because of their impressive management and strategic approach.
The manufacturing of precursors for Polyurethane foams, coatings, Polycarbonate, and other speciality products is the area of expertise of the well-known corporation Covestro. ADNOC's initial plan was turned down by the corporation because it needed to be proved superior. Additionally, Covestro expressed worries regarding ADNOC's plans for its specialities businesses.
Abu Dhabi National Oil Co. has been working hard to allay these initial worries and show Covestro's specialized chemical plants the advantages of their offer. These initiatives led to ADNOC recently raising their acquisition bid for Covestro.
Covestro's stock has decreased by 2.9 percent. The stock did, however, previously experience a rise in late trading because of ADNOC's expanded bids, reaching its highest level since February 2022.
ADNOC may need to submit a bigger offer to persuade Covestro to accept the planned takeover. According to sources, the board of directors of Covestro would find a revised offer of Euro 61.5 per share more alluring. As of right now, representatives from ADNOC and Covestro have chosen to remain mute and have declined to comment on the situation.
To purchase Covestro, ADNOC increased its offer to around Euro 57 per share, or Euro 11 billion. Covestro hasn't made any plans yet, though, because they believe ADNOC will raise their offer even further.
The state-owned oil corporation of the United Arab Emirates (UAE) is the Abu Dhabi National Oil corporation, or ADNOC. In terms of production, it ranks as the world's twelfth largest oil company. The largest oil company in the United Arab Emirates is planning to increase its oil production capacity from the existing 4 million barrels per day (bpd) as of 2021, to 5 million bpd by 2030. During the 1990s, ADNOC's production remained essentially constant at 2.5 million barrels per day (MMB/D). In 2008, it was 2.9 mbpd. Although the corporation has been characterized as secretive, making it difficult to examine its financial statistics, it has also been characterized as effective and well-managed.
