Adnoc secures 95% stake in Germany's Covestro in its biggest-ever acquisition

Adnoc's global energy investment arm XRG has secured a 95.1 per cent stake in German chemicals company Covestro, in what is the UAE state energy company's biggest-ever acquisition.

Adnoc International Germany Holding, a wholly-owned indirect subsidiary of XRG, holds a 83.43 per cent stake in Covestro, while XRG has a 11.68 per cent stake, the German company said in a regulatory filing to the Frankfurt Stock Exchange on Tuesday.

Adnoc had submitted a €14.7 billion ($17 billion) takeover proposal for Covestro in October last year. XRG, formed in November 2024, said a month later that it would become the majority shareholder of Covestro, after the German chemicals company’s shareholders accepted a takeover offer.

The proposal underwent scrutiny from the European Commission under its rules on foreign subsidies, and in September this year, regulators sought to obtain additional information from Adnoc. A month later, XRG submitted new proposals to address the commission's concerns.

On December 10, XRG said that it had completed its voluntary public takeover offer to the shareholders of Covestro. As part of the transaction, XRG completed a capital increase of €1.17 billion to boost Covestro’s balance sheet under the new ownership structure.

The acquisition “strengthens XRG’s international footprint in chemicals and supports our ambition to become a top three global investor in the sector”, Rainer Seele, president of global chemicals at XRG, said in a statement to The National.

Both companies will work “to realise [Covestro's] full potential”, he said.

XRG was launched as an international lower-carbon energy and chemicals investment company, with an enterprise value exceeding $80 billion.

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The latest deal will enable XRG to tap into Covestro's portfolio, comprised of more than 10,000 specialty solutions, 46 production sites and 13 research and development centres.

Covestro's operations supports sectors such as mobility, construction, electronics, and healthcare, which are key to the global economy and energy transition. The company's products support production of electric vehicles, wind-turbine blades, semiconductors, smartphones and eyeglass lenses.

XRG has been actively increasing its operations globally and plans to double its asset value over the next decade, capitalising on the energy transition, artificial intelligence and the rise of emerging economies.

In November, XRG signed an initial agreement with Argentina’s YPF and It