Abu Dhabi National Oil Co. has made a preliminary takeover approach for German chemical producer Covestro AG, people with knowledge of the matter said.
The state-backed energy company has held initial talks with officials from Leverkusen-based Covestro to express its interest in a deal, according to the people, who asked not to be identified because the information is private. Covestro shares have risen about 7% this year, valuing the company at €7.5 billion ($8.2 billion). Deliberations are in the early stages and there’s no certainty that Adnoc will decide to proceed with a takeover, the people said. A representative for Adnoc declined to comment, while a spokesperson for Covestro wasn’t immediately available to comment.
Adnoc, which pumps almost all the oil for OPEC member United Arab Emirates, has outlined plans to invest $150 billion to expand its natural gas, chemicals and cleanenergy operations globally. It’s part of a push by Persian Gulf oil producers to diversify from sales of crude and preempt countries phasing out transport fuels such as gasoline and diesel.
Last year, Adnoc bought shares worth about €3.9 billion in Austria’s OMV AG in a bid to boost exposure to chemicals production. It also owns 25% of Borealis AG, an Austrian chemicals and plastics maker 75%-held by OMV. Adnoc in May teamed up with Apollo Global Management Inc. to bid for control of Brazilian petrochemical producer Braskem SA.