Covestro AG and Adnoc’s Acquisition Under EU Scrutiny

The European Union has initiated a detailed investigation into the planned acquisition of Covestro AG by Abu Dhabi National Oil Company (Adnoc). This move comes amid concerns over potential foreign subsidies that could distort competition within the EU market.

Background on Covestro AG

Covestro AG, a German company based in Leverkusen, is a leading manufacturer of polymers and high-performance plastics. The company serves various industries, including automotive, construction, health, electronics, and medical engineering. Covestro is listed on the Frankfurt Stock Exchange and trades on the Xetra exchange. As of July 24, 2025, Covestro’s close price was EUR 59.9, with a 52-week high of EUR 60.9 and a low of EUR 56.2.

Details of the Acquisition

Adnoc, the state-owned oil company of the United Arab Emirates, announced plans to acquire Covestro for approximately EUR 12 billion (USD 14 billion). This acquisition has attracted significant attention due to its size and the strategic importance of Covestro in the chemical industry.

EU’s Concerns and Investigation

The European Commission has expressed preliminary concerns that Adnoc may have benefited from subsidies, which could give it an unfair advantage in the acquisition. This investigation is part of the EU’s stringent new foreign-subsidy rules aimed at ensuring fair competition within the bloc.

Multiple sources, including Finanznachrichten.de, Finanzen.net, Seeking Alpha, Manager Magazin, and Bloomberg, have reported on the EU’s decision to probe the deal more closely. The investigation will assess whether the subsidies in question violate EU competition laws.

Market Reaction

The news of the EU’s investigation has impacted the market, with German stocks initially opening on a firm note due to easing trade war concerns between the U.S. and the EU. However, the market sentiment shifted as investors considered the implications of the EU’s probe into the Covestro-Adnoc deal.

As the investigation unfolds, stakeholders will be closely monitoring the outcome, which could have significant implications for both Covestro and Adnoc, as well as the broader chemical industry in Europe.