The European Commission is poised to approve the $17 billion acquisition of Covestro by the Abu Dhabi National Oil Company (ADNOC), following key concessions made by the UAE-based energy firm to address regulatory concerns. The deal, valued at €14.7 billion, represents ADNOC’s largest-ever foreign investment and a significant expansion into the European chemicals sector.
Sources close to the review process indicate that the Commission’s approval hinges on ADNOC’s agreement to amend its articles of association, a move designed to alleviate concerns over state subsidies and potential market distortion. The Commission had launched an in-depth investigation earlier this year under the EU Foreign Subsidies Regulation, scrutinizing whether ADNOC’s state-backed financing could unfairly influence competition within the bloc.
Strategic and Regulatory Implications
The acquisition of Covestro, a global leader in polymers and high-performance materials, signals ADNOC’s strategic pivot toward downstream diversification and green chemistry, aligning with its broader energy transition goals. Covestro’s portfolio includes key materials used in automotive, electronics, and construction—sectors where ADNOC seeks long-term growth.
EU regulators reportedly sought feedback from competitors and stakeholders before ADNOC submitted its revised governance structure. The changes are expected to enhance transparency, limit state influence, and ensure compliance with EU competition standards.
Market Reaction and Next Steps
Industry analysts view the deal as a landmark moment in EU-Gulf economic relations, potentially opening the door for further investment flows from sovereign-backed entities. The Commission’s final decision is anticipated within days, pending formal confirmation of the agreed remedies.
If approved, the transaction will mark a turning point in ADNOC’s global expansion strategy and reinforce the EU’s commitment to balanced foreign investment oversight. Covestro shareholders are expected to vote on the offer later this quarter.
Sources: Reuters, EnergyNow, AGBI, Zawya, PwC Legal.
