XRG, the international investment arm of Abu Dhabi National Oil Company (ADNOC), has achieved a significant milestone by securing a 91.32% stake in Covestro AG, a leading German polymer materials manufacturer. This development follows the acceptance of XRG’s takeover offer by Covestro’s shareholders, marking ADNOC’s largest acquisition to date, valued at €14.7 billion, including debt.
The transaction, which positions XRG as the new majority shareholder of Covestro, is pending regulatory approvals and is anticipated to conclude in the latter half of 2025. This acquisition represents the largest foreign takeover by a Gulf entity, reflecting the region’s strategic efforts to diversify its economic interests beyond oil.
Dr. Sultan Ahmed Al Jaber, Minister of Industry and Advanced Technology and Executive Chairman of XRG, expressed enthusiasm about the acquisition, stating that it accelerates XRG’s ambition to become a top five global chemicals player. He emphasized XRG’s commitment to supporting Covestro’s ‘Sustainable Future’ strategy and unlocking new growth opportunities in collaboration with Covestro’s management and employees.
Covestro, headquartered in Leverkusen, Germany, is renowned for producing high-quality polymer materials, including polyurethanes and polycarbonates, serving industries such as automotive, construction, and electronics. The company’s expertise aligns with XRG’s strategic objectives in the chemicals sector.
The acquisition is part of ADNOC’s broader strategy to expand its presence in the global petrochemicals sector, which it views as a key area for future growth alongside gas, liquefied natural gas (LNG), and renewable energy. In line with this strategy, ADNOC has been actively pursuing international investments to diversify its portfolio and reduce dependence on oil revenues.
XRG, valued at over $80 billion, was established to focus on overseas investments in lower-carbon energy, including gas and chemicals. The formation of XRG underscores ADNOC’s commitment to expanding its international footprint and investing in sustainable energy solutions.
The acquisition of Covestro is expected to enhance XRG’s capabilities in the chemicals sector, providing access to advanced technologies and a diversified product portfolio. This strategic move is anticipated to create synergies that will drive innovation and growth, positioning XRG as a formidable player in the global chemicals market.
The successful completion of this transaction is subject to regulatory approvals, including merger control and foreign investment clearances. Both XRG and Covestro are committed to working closely with relevant authorities to ensure a smooth and timely completion of the acquisition.
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