ADNOC Advances Covestro Deal Amid EU Subsidy Probe

On September 11, the Abu Dhabi National Oil Company (ADNOC) moved to address concerns raised by the European Union regarding its planned €14.7 billion ($17.2 billion) acquisition of Covestro. Following ADNOC’s announcement, its share price rose and Covestro’s stock climbed 5.5%. Insiders revealed that ADNOC is considering converting a proposed €1.2 billion capital increase into a shareholder loan, while also pledging to keep Covestro’s technology and intellectual property in Europe.

The deal has been under investigation by the European Commission under the Foreign Subsidies Regulation (FSR) since July, amid fears that state support from the UAE could distort competition. On September 3, however, the EU temporarily suspended its review due to missing information, raising concerns from stakeholders like XRG, which criticized the Commission’s demands as “unreasonable and invasive.” Despite this, Covestro reiterated its confidence that the deal would close as scheduled in the second half of 2025.

The acquisition marks ADNOC’s largest-ever transaction, valued at €11.7 billion excluding debt and pensions. It reflects both ADNOC’s global expansion strategy and the Gulf state’s push to strengthen its presence in Europe’s chemical sector.