FRANKFURT (AFP) – Chemical maker Covestro said yesterday that it had entered into “concrete negotiations” with the United Arab Emirates (UAE) national energy firm ADNOC after a takeover proposal valuing the German group at nearly EUR12 billion (USD12.8 billion).
Covestro’s shares surged more than five per cent in Frankfurt after the announcement, which comes after it first disclosed talks were ongoing with the UAE firm in September last year.
“The discussions so far have shown that Covestro and ADNOC can generally reach a common understanding regarding core aspects of a possible transaction,” Covestro in a statement.
It said the “starting point” for talks was a “possible offer price” of EUR62 per share from ADNOC. This would value Covestro at EUR11.72 billion, according to an AFP calculation.
“At this time, there is no certainty whether the upcoming negotiations will lead to an agreement. There is also no certainty as to the final terms of any such agreement,” said Covestro.
ADNOC is headed by Sultan al-Jaber, who was president of the COP28 climate talks.
The German firm, based in Leverkusen, has expertise in areas such as chemical recycling that are key for the future of the industry, and which ADNOC is interested in.
Reports first emerged last year that ADNOC had approached Covestro about a potential takeover but initial advances were rejected, leading the UAE side to improve its offer.
The Emirati firm’s initial approaches included a takeover price of EUR55 and then EUR57 per share, according to Bloomberg News.
The vital German chemicals industry, which accounts for about five percent of the country’s gross domestic product, has in recent times been gripped by crisis.
