It seems like Covesto's sale to Adnoc is coming to a close, boosting shares in the process.
For some time now, there's been whispers of Adnoc aiming to acquire chemical company Covesto. Sources indicate that the financial evaluation of Covesto is almost done. A suggested price of 62 euros per share for this DAX company is still on the table.
Three confidants reveal that the inspection phase is drawing to a close, with major hurdles having been overcome. September might see an announcement, keeping the proposed price of 62 euros per Covesto share in mind. Neither Covesto, Adnoc, nor Bloomberg commented on the matter.
On the stock market, Covesto shares shot up by 5.7% to 56.90 euros, reaching their highest level in nearly three years. They even led the DAX. In late June, Covesto announced starting serious talks with Adnoc.
Initially, Adnoc hinted at a potential offer for 62 euros per share, contingent on the results of the Covesto financial review. This would value the DAX company at 11.7 billion euros. Later, Covestro's CFO, Christian Baier, confirmed advancements in discussions with Adnoc, stressing on the cooperative nature of negotiations.
Covestro used to be Bayer's plastics division, which it took public in 2015. The company has a global workforce of around 17,500, with nearly 7,000 in Germany. Covestro manufactures precursors for various industries, such as automotive, furniture, appliances, and construction. These are found in mattresses, car seats, wind turbine blades, and more.
Should Adnoc's acquisition of Covestro succeed, the chemical industry could undergo a significant change due to Covesto's role as a principal supplier of precursors for various industries. Nevertheless, Adnoc hasn't discussed any official intentions to expand its chemical sector presence through this purchase yet.
Lastly, it's worth mentioning that Adnoc has agreed to purchase Covestro for 14.7 billion euros, including debt. This strategic move aligns with Adnoc's aspirations to diversify beyond oil and focus on a lower-carbon energy and chemicals portfolio.
Additional Insights:
Adnoc's brave step into the chemical industry is not an isolated move. Other Gulf energy firms are also turning their attention to sustainable sectors to create more environmentally-friendly economies and reduce carbon footprints.
