Covestro opens books to ADNOC over $12.5 billion takeover offer
FILE PHOTO: The logo of German chemicals maker Covestro is pictured outside its headquarters in Leverkusen, Germany, July 26, 2019. REUTERS/Wolfgang Rattay/File Photo
By Ludwig Burger
FRANKFURT (Reuters) -German chemicals firm Covestro is giving ADNOC access to its books and stepping up talks based on an improved 11.7 billion euro ($12.5 billion) takeover offer, after more than a year of courtship by the Emirates' energy company.
The maker of plastics and chemicals for construction and engineering said on Monday it believed the two sides could "generally reach a common understanding regarding core aspects of a possible transaction including support for Covestro's further growth strategy".
Discussions, which had previously been described as open-ended, will now be "concrete negotiations", with Covestro providing due diligence information, after ADNOC, short for Abu Dhabi National Oil Co, made a 62 euros per share offer, it said.
That was up from 60 euros previously, according to what people familiar with the talks had told Reuters.
Covestro shares were up 5.4% to 53.98 euros at 1030 GMT.
A spokesperson for ADNOC welcomed Covestro's decision: "We look forward to jointly working with Covestro to swiftly progress due diligence for this important transaction".
It has taken the two sides more than a year to get to this stage. ADNOC's initial informal offer to Covestro was reported in June 2023, but it wasn't until September last year that the German company entered into open-ended formal discussions.
ADNOC has been pursuing a series of European targets. It has also been in talks with Austria’s OMV to create a chemicals giant with combined annual sales of more than $20 billion.
In December, it agreed to buy European chemical producer OCI's stake in ammonia and urea producer Fertiglobe for $3.6 billion. Reuters reported in April that it had for a while considered buying Britain's BP.
($1 = 0.9327 euros)
(Reporting by Ludwig BurgerEditing by Friederike Heine and Mark Potter)