Covestro and XRG receive final outstanding regulatory approval for their strategic cooperation

Covestro AG and XRG P.J.S.C. (formerly ADNOC International Limited, together with its subsidiaries in the following "XRG") have received the German Federal Ministry for Economic Affairs and Energy's final regulatory approval under foreign investment rules for their strategic partnership. This ensures that all of the transaction's closing criteria are met. The transaction is scheduled to occur in the next days. With this achievement, Covestro and XRG will begin on a collaborative journey to reshape the chemical industry through innovation, circularity, driving digital transformation, and enhancing their leading role in high-growth areas.

"This is an exciting new chapter for Covestro," stated Dr Markus Steilemann, CEO of Covestro. "With XRG as a strong and long-term partner, we will accelerate innovation and digital transformation, scale circular solutions, and set new benchmarks in the chemical sector. Together, we are well-positioned to advance our 'Sustainable Future' plan. Our collaboration symbolises not just our same goals and ambitions for a prosperous future and a new chemical era, but also mutual benefits and potential for Covestro and XRG, as well as our customers, suppliers, employees, and all other stakeholders."

Dr. Rainer Seele, President of Global Chemicals at XRG, stated, "Obtaining these regulatory clearances enables us to go forward and focus on developing a long-term, stable cooperation with Covestro. This acquisition expands XRG's international presence in chemicals and supports our goal of being a top three global investor in the sector. We have a high regard for Covestro's personnel and experience, and we look forward to collaborating closely with the company's management team to realise its full potential."

Supporting Covestro's 'Sustainable Future' Strategy

The cooperation is based on a common commitment to confronting major megatrends and impacting global businesses and society. By combining XRG's power and global reach with Covestro's expertise in breakthrough technologies and circular solutions, the two firms hope to create new opportunities and long-term value for all stakeholders. Upon completion, Covestro's ongoing transformation will be bolstered by a EUR 1.17 billion capital boost, allowing for the timely implementation of major investment plans and the expansion of its 'Sustainable Future' strategy.

With XRG as a long-term shareholder, Covestro will continue to focus on scaling its circular economy ambitions, driving digital transformation through advanced technologies such as AI and quantum computing, and expanding its activities in high-growth sectors such as mobility, construction, and electronics. XRG's experience in energy transition will help Covestro achieve its sustainability goals by offering access to cleaner energy options and increasing resilience in a rapidly changing global landscape.

A solid foundation for long-term growth and continuity

Key parts of the agreed-upon strategic agreement include Covestro, a global leader in high-quality polymer materials, serving as the foundational platform for XRG's Performance Materials and Speciality Chemicals businesses. According to the provisions of the Investment Agreement, Covestro will maintain its autonomy, with the Board of Management, chaired by CEO Dr Markus Steilemann, continuing to supervise operational management and strategic direction. XRG will work with Covestro's management to identify more possibilities to improve operational efficiency, build resilience, and create long-term value as the company enters this new phase. Furthermore, in accordance with the provisions of the Investment Agreement, at closing, Covestro retains its corporate structure, German corporate governance norms, and current general works agreements, as well as its registered offices in Leverkusen.

Source: PUdaily