Reassurance: No need for concerns.
The ongoing acquisition of German chemical firm Covestro by the Abu Dhabi National Oil Company (ADNOC) is currently under an in-depth investigation by the European Commission (EC), focusing on potential distorting subsidies [1][2][3]. This probe, which began in July 2025, is scheduled to conclude by December 2, 2025 [1].
The transaction, valued at around $14-16 billion, has attracted scrutiny due to the suspicion that foreign subsidies may have enabled ADNOC to offer an unusually high price, potentially discouraging other bidders and distorting market competition [1][2][4].
Although the EU investigation introduces a degree of regulatory uncertainty, sources indicate that the deal is likely to be approved following the review, reflecting a more stringent EU stance on foreign government-backed acquisitions compared to more welcoming policies observed in the US [3][4].
Covestro's financial challenges, stemming from trade disruptions and tariffs, add to the complexity of the acquisition environment. However, these issues do not directly affect the antitrust review itself [1].
Despite the regulatory review, Covestro's Chief Financial Officer, Christian Baier, remains confident that the takeover can be completed in the second half of the year. Baier also stated that the review has not created any new uncertainty for the company [2].
Baier has expressed concern about the impact of trade issues on Covestro's expected positive effects in the second half of the year. However, he does not see any short-term recovery for Covestro's business development [2].
The stock price of Covestro dipped slightly in response to the news of the review but remains unfazed by the process [5]. The company has anticipated the review, and Covestro's shareholders can expect approximately 62.00 euros per share in the second half of the year, assuming the takeover by Adnoc is approved [5].
In summary:
- Status: Under EU in-depth foreign subsidies investigation since July 2025.
- Expected completion: By December 2, 2025.
- Conditions: Clearance for antitrust, foreign trade, and EU foreign subsidies regulations.
- Deal outlook: Expected to close in H2 2025 if approvals obtained, but with regulatory risk extending through late 2025 [1][2][3].
- Despite the review, Baier remains confident that the takeover can be completed in the second half of the year.
- Covestro's Chief Financial Officer, Christian Baier, does not view the company as needing to closely follow the news anymore after the trade deal between the EU and the US.
References:
- Reuters
- Bloomberg
- Wall Street Journal
- Financial Times
- MarketWatch
The ongoing EU investigation into foreign subsidies related to the acquisition of Covestro by ADNOC is affecting the business environment, potentially impacting the deal's closing due to regulatory uncertainties [1][2][3]. Despite this, Covestro's Chief Financial Officer, Christian Baier, maintains confidence in the transaction's successful completion in the second half of the year, expressing less concern about trade news after the EU-US trade deal [2].
