The Abu Dhabi National Oil Company (Adnoc) is set to acquire the German plastics company Covestro for 62 euros per share, marking a significant investment of approximately 16 billion euros.

This acquisition, valued at nearly $13 billion, represents the largest Middle Eastern purchase of a European firm and reflects Adnoc's strategic shift towards diversifying its investments.

Negotiations for the acquisition began over a year ago, with formal discussions commencing in June 2024, and the deal is nearing completion.

The acquisition requires a minimum acceptance threshold of 50 percent plus one share and is subject to regulatory approvals, including merger control and foreign investment clearances.

Covestro's CEO, Markus Steilemann, has stated that the agreement is in the best interest of the company's employees, shareholders, and stakeholders, ensuring sustainable growth.

Adnoc's investment in Covestro will provide access to advanced materials used in electric vehicles and energy-efficient applications, aligning with its sustainable growth strategy.

Adnoc has committed to protecting German jobs and maintaining Covestro's current management strategy, which has garnered support from Covestro's management and supervisory boards.

Covestro specializes in producing rigid and flexible foams and hard plastics for various industries, including automotive, construction, electronics, and furniture.

Overall, this acquisition is part of Adnoc's strategy to become one of the world's top five chemical companies, using Covestro as a platform for performance materials and specialty chemicals.

Under CEO Sultan Al Jaber's leadership, Adnoc has transformed into a significant player in the global energy market, focusing on enhancing its oil production capacity and expanding operations overseas.

This acquisition is expected to benefit Covestro, its shareholders, and employees in the short term, as the company currently faces weak demand in key sectors.

The deal signifies a notable shift in Germany's economic landscape, highlighting the increasing foreign investment from state-owned enterprises.