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ADNOC increases its offer for the prominent polyurethane and polycarbonate manufacturer, Covestro, to a whopping €11 billion in a takeover bid

Jul 20, 2023

Abu Dhabi National Oil Co. (ADNOC), a prominent energy company seeking to expand its chemical business through strategic deals, has increased its bid to acquire Covestro AG, proposing a substantial amount of Euro 11 billion (USD 12.4 billion).

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The revised proposal now offers an estimated Euro 57 per share, surpassing their previous informal bid of roughly Euro 55. Adnoc is keen to initiate discussions with the renowned German company, given their impressive management and strategic approach, as cited by sources familiar with the matter.

Covestro is a well-known company that specializes in the production of precursors for polyurethane foams, coatings, polycarbonate, and other specialty products. In response to Adnoc's previous proposal, the company rejected it due to needing to be deemed higher. Additionally, concerns were also highlighted by Covestro over Adnoc's ambitions for its specialties operations.

Despite these initial concerns, Adnoc has been working diligently to address them and demonstrate the benefits of their offer to Covestro's specialty chemical operations. As a result of these efforts, Adnoc recently increased their offer to acquire Covestro.

As per the Frankfurt trading report, Covestro has experienced a fall in its shares by 2.9 percent. However, it's worth noting that the stock had previously seen an increase in late trading due to Adnoc's increased offers, reaching its highest level since February 2022.

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According to experts, it is suggested that Adnoc may need to make a higher bid in order to convince Covestro to agree to the proposed acquisition. Based on some analysts' predictions, an offer of Euro 61.5 per share, which is a revised amount, might be more attractive to Covestro's board of directors. As of now, representatives from both Adnoc and Covestro have opted to remain silent on the matter and declined to provide any comments.

According to Procurement Resource, Adnoc has raised their bid to acquire Covestro to approximately Euro 57 per share, totaling Euro 11 billion. However, Covestro has not made a decision regarding this matter yet, as they are anticipating that Adnoc will increase their offer even more.