Covestro Signs Investment Agreement with ADNOC, Supporting €62.00 Takeover Offer for Shareholders

Covestro Signs Investment Agreement with ADNOC, Supporting €62.00 Takeover Offer for Shareholders

(IN BRIEF) Covestro AG has signed an Investment Agreement with ADNOC International Germany Holding AG, which supports ADNOC’s public takeover offer for all Covestro shares at €62.00 each, valuing the company at approximately €11.7 billion. The agreement ensures ADNOC’s commitment to Covestro’s “Sustainable Future” growth strategy while maintaining its existing governance structure. ADNOC International will subscribe to new shares at the offer price, resulting in proceeds of €1.17 billion to help further Covestro’s strategic objectives. The transaction requires a minimum acceptance of 50% plus one share and is subject to regulatory approval. Covestro’s management will retain operational control, and the existing Supervisory Board structure will remain intact.

(PRESS RELEASE) LEVERKUSEN, 3-Oct-2024 — /EuropaWire/ — Covestro AG today announced the signing of an Investment Agreement with ADNOC International Germany Holding AG, which outlines key aspects of a strategic partnership and supports ADNOC’s public takeover offer for all Covestro shareholders at a price of €62.00 per share. This acquisition price implies an equity valuation of approximately €11.7 billion and represents a 54% premium over the unaffected share price prior to any media coverage regarding a potential transaction.

The Investment Agreement details ADNOC International’s commitment to fully support Covestro’s “Sustainable Future” growth strategy while ensuring the preservation of the company’s established governance structure. This strategic collaboration is designed to fortify Covestro’s position in attractive sectors, providing a robust foundation for sustainable growth.

Under the terms of the agreement, ADNOC International will subscribe to new Covestro shares at the offer price via a capital increase, which is expected to yield proceeds of €1.17 billion. These funds will be directed towards advancing Covestro’s strategic objectives. Covestro’s Board of Management and Supervisory Board have expressed their support for the offer based on this comprehensive agreement.

Dr. Markus Steilemann, CEO of Covestro, remarked, “The partnership with ADNOC International represents a significant milestone for our company, employees, shareholders, and stakeholders. With the backing of ADNOC International, we are poised to enhance our growth in highly attractive markets and further contribute to the green transformation. Our shared commitment to innovation and sustainability will serve as the bedrock of our collaboration.”

His Excellency Dr. Sultan Ahmed Al Jaber, ADNOC Managing Director and Group CEO, added, “Covestro’s expertise in high-tech specialty chemicals and materials makes this partnership a natural fit with ADNOC’s vision of becoming a top global chemicals company. This agreement marks a pivotal moment for both organizations, aligning with our strategy to invest in assets that drive long-term value while addressing the increasing global demand for energy and chemical products.”

Key details of the transaction include a cash offer to Covestro shareholders at €62.00 per share, which requires a minimum acceptance level of 50% plus one share, as well as compliance with standard closing conditions. The official offer document is anticipated to be available within six weeks, pending regulatory approval.

The agreement emphasizes the commitment of ADNOC International to uphold Covestro’s existing business operations and governance, ensuring no significant reductions in business activities will occur. Moreover, ADNOC International has pledged to maintain the integrity of Covestro’s technology and intellectual property throughout the partnership.

The existing governance framework, including the co-determined Supervisory Board, will remain intact, with two independent members ensuring ongoing oversight post-acquisition. Covestro’s management team will retain operational control and strategic direction, reinforcing ADNOC International’s confidence in their leadership.

Following the completion of this transaction, Covestro’s Board of Management has decided to suspend dividend payments until the regulatory approval process concludes or the Investment Agreement is terminated.

Goldman Sachs and Perella Weinberg are advising Covestro’s Board of Management on the transaction, while Linklaters serves as legal counsel. Rothschild & Co and Macquarie Capital are acting as financial advisors for Covestro’s Supervisory Board, with legal advice provided by SZA Schilling, Zutt & Anschütz.

About ADNOC International:

ADNOC International holds assets and investments across sectors spanning energy, chemicals and low-carbon solutions globally.

About Covestro:

Covestro is one of the world’s leading manufacturers of high-quality polymer materials and their components. With its innovative products, processes and methods, the company helps enhance sustainability and the quality of life in many areas. Covestro supplies customers around the world in key industries such as mobility, building and living, as well as the electrical and electronics sector. In addition, polymers from Covestro are also used in sectors such as sports and leisure, telecommunications and health, as well as in the chemical industry itself.

The company is geared completely to the circular economy. In addition, Covestro aims to achieve climate neutrality for its Scope 1 and Scope 2 emissions by 2035, and the Group’s Scope 3 emissions are also set to be climate neutral by 2050. Covestro generated sales of EUR 14.4 billion in fiscal year 2023. At the end of 2023, the company had 48 production sites worldwide and employed approximately 17,500 people (calculated as full-time equivalents).

Forward-looking statements

This news release may contain forward-looking statements based on current assumptions and forecasts made by Covestro AG. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in Covestro’s public reports, which are available at www.covestro.com. The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.

Media Contacts:

Lars Boelke
Global Head of Media Relations
lars.boelke@covestro.com
+49 214 6009 4206
+49 1522 8860494

Sirin Emre-Flender
Corporate Channels & Media Relations
sirin.emre-flender@covestro.com
+49 162 733 0374

Svenja Paul
Global Media Relations
svenja.paul@covestro.com
+49 173 3056862

SOURCE: Covestro