Abu Dhabi's ADNOC in almost $11bn approach for Covestro
Business
Shares in Covestro were up 14% at 46 euros at 1400 GMT
(Reuters) - Abu Dhabi National Oil Company (ADNOC) has approached German plastics and chemicals maker Covestro AG with a takeover proposal worth more than 10 billion euros ($10.9 billion), a person familiar with the matter said on Tuesday.
The energy giant has made an informal offer for a per-share price in the mid-50 euros, which compares with a Monday closing price of 40.31 euros, said the source, asking not to be named because the matter is confidential.
ADNOC did not immediately respond to requests for comment, while Covestro declined to comment.
Covestro, a maker of transparent polycarbonate plastics, as well as chemicals for insulation and upholstery foams, in April, issued earnings guidance that reassured markets about its growth prospects. It also resumed a share buyback programme.
Earlier on Tuesday it confirmed its outlook for 2023.
Shares in Covestro were up 14% at 46 euros at 1400 GMT, trading at their highest in more than a year.
A combination would give energy giant ADNOC, also a maker of refined products and petrochemicals, access to more advanced materials that go into electric vehicles, thermal insulation for buildings as well as coatings, adhesives and engineering plastics.
The group launched a transformation strategy more than four years ago as part of Abu Dhabi's plans to diversify the economy away from energy and attract foreign investment.
ADNOC began floating units in late 2017. Over the past two years, it has separately listed businesses offering investors exposure to its petrochemicals, fertilisers, drilling services, gas as well as logistics businesses.
ADNOC Chief Executive Sultan al-Jaber is leading the company's push into new energy, low-carbon fuels, such as ammonia and hydrogen, as well as liquefied natural gas and chemicals.
