The takeover negotiations had already gone on for over a year. Adnoc initially offered 55 euros per share, which both management and shareholders found too low. After Covestro opened its books at the end of June, due diligence, a detailed examination of the company, began. The now agreed price of 62 euros is more than 50 per cent above the price quoted before Adnoc’s interest came to light. Covestro shares are currently at around 55 euros and rose 3.7 percent in early trading on Tuesday.
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Covestro has recently struggled with low sales prices and has reduced its annual targets. In the second quarter of 2024, operating profit fell by almost 17 percent to 320 million euros. “2024 is very challenging,” Steilemann told Handelsblatt.
In the midst of the takeover, Covestro – along with BASF and Lanxess – is running a comprehensive savings program that provides for annual savings of 400 million euros in material and personnel costs by 2028, of which 190 million euros are in Germany. However, layoffs for operational reasons are excluded until 2032, as a corresponding contract applies to secure employment.
These regulations will remain in force even after the takeover by Adnoc. The investment agreement between the two companies states that Adnoc recognizes all existing German works agreements, collective agreements and collective determination rights of works councils. There are no sales, closures or significant reductions in operations planned and Adnoc is committed to not taking any such action.