Covestro is target of $13.1 billion takeover

By Kris B. Mamula / Pittsburgh Post-Gazette

An Abu Dhabi company has sealed a deal for a $13.1 billion takeover of Covestro AG, a German manufacturer of high-performance polymers with Pittsburgh-area offices in Robinson that employs several hundred people.

The takeover offer by Adnoc Group, including Adnoc International Limited and its subsidiary Adnoc International Germany Holding AG, was $68.71 per Covestro share, for a total value of about $13.1 billion, the companies announced on Tuesday.

Under the investment agreement, Covestro’s corporate governance, organizational business structure and existing business activities will be maintained.

The value of the deal represents a premium of about 54% to the closing price on June 19, 2023, the day prior to any media coverage of a potential deal, and a premium of 21% to the closing price on June 23, 2024, the last share price prior to Covestro’s announcement of starting due diligence and concrete negotiations.

“We are convinced that the agreement reached today with Adnoc International is in the best interest of Covestro, our employees, our shareholders and all other stakeholders,” Covestro CEO Markus Steilemann said in a prepared release. “This strategic partnership is a natural fit and aligns seamlessly with Adnoc’s ongoing smart growth and future proofing strategy and our vision to become a top five global chemicals company.”

There are no plans to sell, close or significantly reduce Covestro’s business activities as a result of the deal, according to the companies. Abu Dhabi National Oil Co., or Adnoc, is a United Arab Emirates state-owned oil company.

Adnoc International is a diversified energy group with assets and investments in chemicals, oil and low-carbon fuels. At the end of last year, Leverkusen, Germany-based Covestro operated 48 production sites worldwide and employed about 17,500 people.

Covestro makes high-performance polymers for the automotive, construction, wood processing, furniture and other industries. About 700 people work at Covestro’s Robinson offices.

The deal needs approval from shareholders and from regulators.