Covestro to Engage in Discussions with Adnoc Over Acquisition Proposal

Covestro AG has decided to initiate discussions with the Abu Dhabi National Oil Co. (Adnoc) regarding Adnoc's revised offer to acquire the German chemical company. This move comes after Adnoc increased its offer to $12.7 billion, signaling its willingness to engage in formal talks with Covestro. Covestro had previously rejected Adnoc's initial offer of approximately $12 billion, which equated to around $53.62 per share, deeming it too low.

Adnoc had reportedly communicated to Covestro that it was prepared to raise its offer to $12.7 billion, approximately $64.34 per unit, contingent on Covestro's willingness to commence discussions.

Covestro recently reported a net income of $49.33 million for the second quarter, with earnings per share amounting to $0.26, marking a recovery from first-quarter losses. The company anticipates earnings before deductions in the range of $1.18 billion to $1.72 billion for the full year. As of the end of the first half of 2023, Covestro's total net debt stood at $3.37 billion.

Covestro emphasized that the outcome and terms of any agreement resulting from these discussions would depend on the course of the forthcoming talks. The company specializes in the production of chemicals used in adhesives, high-performance plastics such as polycarbonate, polyurethane foams, sealants, and films.

Markus Steilemann, CEO of Covestro, expressed the significance of Adnoc's interest in the company, highlighting Covestro's strong position as a leading manufacturer of high-quality polymer materials and its leadership in promoting a circular economy.

Covestro also stressed the importance of Adnoc providing assurances regarding the continuity of its sustainability policy throughout the takeover talks. The company's Board of Management will address the safeguarding of its future- and sustainability-oriented corporate strategy, including corresponding corporate governance provisions, during the discussions.

Regardless of the talks with Adnoc, Covestro remains committed to its "Sustainable Future" strategy, aiming to fully realize its potential and contribute to the transformation towards a circular economy.

Steilemann previously voiced concerns about the economic influence of autocratic regimes, emphasizing the potential consequences for the Western world if such trends continued unchecked. He underscored Covestro's desire to remain in Germany and continue its operations from there.

In summary, Covestro has agreed to engage in discussions with Adnoc following the oil and gas giant's increased acquisition offer of $12.7 billion. The outcome of these talks and any resulting agreement will hinge on the progress of the forthcoming discussions. Covestro's emphasis on sustainability and its commitment to its corporate strategy remain central to the negotiation process.