Abu Dhabi’s state oil giant ADNOC is reportedly on track to secure unconditional EU antitrust approval for its €14.7 billion ($16.6 billion) acquisition of Germany’s Covestro, sources told Reuters on Tuesday.
The European Commission, expected to decide by May 12, sees no competition issues with the deal due to the lack of overlap between ADNOC and Covestro’s operations. That paves the way for ADNOC’s largest-ever acquisition—and a major milestone in its strategy to pivot beyond crude and into downstream and advanced materials.
The transaction will place Covestro—maker of plastics and chemicals used in cars, buildings, and electronics—under the wing of XRG, ADNOC’s international investment arm. Once complete, XRG becomes majority shareholder, marking a major foray by the Gulf into Europe’s industrial backbone.
It’s a notable move in the context of ADNOC’s broader diversification push. As the global energy transition tightens the screws on traditional hydrocarbons, Gulf producers like ADNOC are deploying oil windfalls to snap up strategic assets in chemicals, fertilizers, and renewables.
So far, the deal has cleared regulators in South Africa and India with no remedies. Still looming, however, is scrutiny under the EU’s new Foreign Subsidies Regulation (FSR), which targets non-EU firms perceived to benefit from unfair state support. ADNOC has not yet filed under the FSR, though it successfully passed that hurdle last year in its acquisition of Fertiglobe.
Covestro, for its part, is projecting a weaker 2025, having cut its core profit outlook Tuesday morning. But with ADNOC’s backing, the company gains both financial firepower and long-term security.
If the deal closes as expected in the second half of 2025, it will mark one of the clearest signs yet that Middle Eastern oil wealth is being redeployed to secure a stake in the industries of tomorrow—before Europe shuts the door.
By Julianne Geiger for Oilprice.com
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