Updated: Covestro AG has rejected an $11 billion offer from Abu Dhabi National Oil Co. (ADNOC) but may be signaling that the price is too low.
Neither company has commented publicly. A June 22 Bloomberg report said Covestro had rejected the ADNOC offer as too low. The report quoted Arne Rautenberg, fund manager at Union Investment, saying that Covestro "is cheaply valued" and that Covestro shareholders accepting an offer "would probably only be a matter of price."
Rautenberg was speaking for himself, not shareholders.
Reports of the ADNOC offer caused Covestro's per-share stock price to climb from a closing price of 40.30 euros ($43.90) on June 19 to 48.85 euros ($53.20) in early trading June 23, an increase of 21 percent.
Reuters and Bloomberg both reported on the offer on June 20. Officials with Covestro declined to comment when reached by Plastics News. ADNOC officials could not be reached for comment.
Abu Dhabi-based ADNOC has been increasingly active in petrochemicals deals in 2023. In May, the state-owned firm — which ranks as one of the world's 10 largest oil and gas companies — joined private equity giant Apollo Global Management in an offer to buy Novonor's controlling share in materials maker Braskem SA.
Braskem officials said at the time that they were "evaluating other possibilities." Novonor's 38 percent stake in Braskem was worth about $1.6 billion in early May.
In January, ADNOC acquired a 25 percent stake in materials firm Borealis from Abu Dhabi-based Mubadala Investment Co. The remainder of Borealis is owned by Austrian oil and gas firm OMV.
The June 20 Reuters story said that acquiring Covestro would give ADNOC access to more advanced materials for electric vehicles and thermal insulation for buildings, as well as coatings, adhesives and engineering plastics. A deal would also support Abu Dhabi's plans to diversify its economy away from energy, the report said.
Covestro is based in Leverkusen, Germany, and has U.S. headquarters in Pittsburgh. The company is a global supplier of polycarbonate resins and films, thermoplastic polyurethane, PU materials and foams, and other specialty chemicals and materials. The firm employs almost 18,000 and posted sales of $19.6 billion in its 2022 fiscal year.