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ADNOC: EU approval for Covestro $17 billion deal should be secured by robust remedies

ADNOC, the Abu Dhabi state oil company's international investment arm, has said that it submitted robust remedies to win EU approval for the 14.7 billion-euro (17 billion-dollar) bid for Germany’s Covestro. ADNOC has submitted robust remedies that should win EU approval for its 14.7-billion-euro ($17 billion) bid for Germany's Covestro, the international investment arm of Abu Dhabi state oil giant, said on Monday. The European Commission is currently examining the deal. It is ADNOC’s largest acquisition ever and one of the biggest foreign takeovers by an EU company from a Gulf State.

In the case of Covestro, it is the issue of a guarantee from the state and the possibility that foreign aid could be involved.

In a press release, a spokesperson from ADNOC’s XRG stated that "we have submitted a robust package of proposed engagements", without giving details on the remedies.

"They demonstrate our long-term investment and show the strength of the transaction. We are confident that this will result in a timely clearance." ADNOC offered two remedies, which were proposed changes to the articles of association in order to eliminate EU concerns over the state's unlimited guarantee, and a promise to retain Covestro’s intellectual property throughout Europe.

They said that the Commission had no further concerns with Covestro's capital increase of 1.2 billion euros.

Separately, on September 3rd, a day following the submission of remedies to the EU watchdog, it paused the investigation.

In an email, a spokesperson from the EU executive stated that "the Commission can stop time if it does not receive in a timely manner a material piece information requested by the parties."

Once the missing information has been provided by the parties, then the clock will be reset and the deadline for the Commission to make a decision will be adjusted.

(source: Reuters)