The XRG, the global energy investment division of Adnoc, has acquired a 95.1 percent stake in the German chemicals firm Covestro, as it is the largest acquisition undertaken by the UAE state energy company.
The German company said in a regulatory filing to the Frankfurt Stock Exchange on Tuesday that Adnoc International Germany Holding, an indirect subsidiary of XRG, owns an 83.43 percent stake in Covestro, with XRG having an 11.68 percent stake in the German company.
Adnoc had already made a takeover proposal of Covestro worth €14.7 billion ($17 billion) in October last year. XRG was established in November 2024 stated a month later, it would be the majority shareholder in Covestro, with shareholders of the German chemicals company having voted to accept a takeover offer.
The offer was reviewed by the European Commission in its provisions on the rules concerning foreign subsidies, and in September this year, regulators called on Adnoc to provide them with more information.
XRG presented new offers for dealing with the concerns of the commission after a month. XRG announced that it had fulfilled its voluntary public takeover bid to the shareholders of Covestro on December 10.
Under the new structure of ownership, XRG closed a capitalization of €1.17 billion as part of the transaction to increase the balance sheet of Covestro.
In a statement to The National, President of global chemicals at XRG, Rainer Seele, said that the acquisition “strengthens XRG’s international footprint in chemicals and supports our ambition to become a top three global investor in the sector.”
He added that both companies will work “to realise [Covestro’s] full potential.”
XRG was started as a global lower-carbon energy and chemicals investment company, whose enterprise value is over $80 billion.
The new agreement will help XRG to gain access to the portfolio of Covestro, which has over 10,000 specialty solutions, 46 production plants, and 13 research and development facilities.
Therefore, Covestro serves sectors in the global economy and energy transition, such as mobility, construction, electronics, and healthcare, which are supported by its operations.
The products of the company assist in making electric vehicles, wind-turbine blades, semiconductors, smartphones, and eyeglass lenses.
XRG is actively expanding its activities internationally and intends to multiply the value of its assets within the coming decades, which is in line with the energy transition, artificial intelligence, and the emergence of new economies.
XRG entered into an initial contract in November with YPF of Argentina and Eni of Italy to build an integrated liquid natural gas venture in the South American country. It also signed a non-binding contract to buy a stake in the Southern Gas Corridor in Azerbaijan, to sustain its strategy in the region in Caspian region.
XRG acquired 11.7 percent in September in the first phase of the Rio Grande LNG project in Texas, which was the first natural gas investment of XRG in the US.
In the same month, another consortium headed by XRG also revoked its bids to purchase Santos, which is the second-largest gas producer in Australia.
A consortium including Abu Dhabi sovereign wealth fund ADQ and international investment firm Carlyle had presented Santos with a $19 billion indicative offer to acquire in June.
Adnoc further reported in September that it is transferring equity holdings in its listed firms to XRG. The companies that will be part of the transfer are Adnoc Distribution, Adnoc Drilling, Adnoc Gas, and Adnoc Logistics and Services, which are listed on the Abu Dhabi Securities Exchange.
Meanwhile, Adnoc affirmed that its entire stake in Fertiglobe is now held through XRG. Adnoc announced in July that it would transfer its 24.9 percent share in Austrian energy company OMV to XRG.
Adnoc and OMV settled on the terms of merging their polyolefins business and forming a global company of $60 billion. They claimed that the joint venture company would be the Borouge Group International, which would bring Adnoc Borouge and OMV Borealis together. The company reported that upon its completion, all the stakes of Adnoc in BGI will be handed over and owned by XRG.
