Diversifying the economy: Abu Dhabi's ADNOC raises Covestro takeover bid to $12.3bn
Business
The German company had rejected the previous offer being too low
BENGALURU (Reuters/Web Desk) – State oil giant Abu Dhabi National Oil Co has increased its buyout offer for Covestro AG to around 11 billion euros ($12.3bn), a person familiar with the proposal told Reuters on Tuesday.
ADNOC's latest bid values Covestro at about 57 euros per share, the person said, up from a mid-50 euro per share range.
Covestro had rejected ADNOC's initial takeover proposal last month, saying the offer was too low.
A Covestro spokesperson declined to comment, while ADNOC did not immediately respond to a Reuters request for comment.
Covestro AG is a Germany-based company engaged in the manufacturing of polymer materials. It develops, produces and markets polyurethanes, polycarbonates and raw materials, as well as coatings, adhesives and other specialties.
A combination with Covestro 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 move would also support Abu Dhabi's plans to diversify its economy away from energy as it was reported earlier this month that the foreign direct investment (FDI) shrank globally but was up 10pc to $23bn in UAE during 2022.
The Gulf states, largely dependent on hydrocarbons for revenue, all have plans underway to diversify their economies and sources of income, and pull in foreign investment.
Read more: Stronger customer demand fuels growth in UAE's non-oil sector
However, the UAE is among the most advanced in that process, having developed sectors such as financial services, trade and tourism as well as implementing social and business reforms.
It is also a source of investment, with $25bn in outward investments last year, up 10pc on the previous year as they are also enhancing the international clout and standing by investing abroad.
Read more: Work in progress to expand CPEC as Pakistan eyes much-needed investment
