EU approves Adnoc's €14.7 billion acquisition of German chemical giant Covestro

Friday 14 November 2025 - 16:50

By: Dakir Madiha

EU approves Adnoc's €14.7 billion acquisition of German chemical giant Covestro

The European Commission has conditionally approved Abu Dhabi National Oil Company's (Adnoc) €14.7 billion acquisition of Covestro, a major German chemical manufacturer. This decision marks one of the most significant foreign takeovers of a European industrial firm by a Gulf state entity, clearing a substantial regulatory hurdle and expanding Adnoc's global footprint in the chemical sector.

Addressing competition concerns

The approval was granted under the EU’s foreign subsidies regulation after Adnoc addressed concerns about potential state-backed advantages. The Commission required Adnoc to alter its corporate statutes to mitigate the competitive risks arising from an unlimited guarantee provided by the United Arab Emirates government. Additionally, the company has committed to sharing some of Covestro’s sustainability patents with industry competitors.

The decision follows an in-depth investigation launched in July under the EU’s stricter foreign subsidies rules. Regulators feared that significant state funding and equity injections might have enabled Adnoc to acquire Covestro under financial conditions that did not align with market practices. To address these issues, Adnoc also pledged to retain Covestro’s intellectual property within Europe, a move supported by feedback from competitors and clients during a regulatory market test.

Strategic expansion for Adnoc

Adnoc’s acquisition of Covestro represents a strategic leap forward. Covestro, originally spun off from Bayer in 2015, is a leading global producer of polyurethanes, polycarbonates, and specialty chemicals used in construction, automotive, and electronics industries. These materials are critical components for manufacturers of smartphones, automobiles, and other advanced technologies.

The deal will be executed through Adnoc’s investment arm, XRG, which was launched in late 2024 and boasts an enterprise value of over $80 billion. XRG aims to position itself among the world’s top five chemical platforms by addressing the projected 70% surge in global chemical demand by 2050. This acquisition also makes XRG one of the three largest global players in the chemical industry.

By acquiring Covestro, Adnoc strengthens its global portfolio while solidifying its role in high-value markets, particularly in Europe. This mo