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Covestro begins formal talks with Adnoc on its $12bn bid

Covestro says any agreement will require the approval of the respective boards and the approval of the competent authorities

German plastics and chemicals maker Covestro confirmed it has started takeover talks with Abu Dhabi National Oil Company (Adnoc).

“Whether, in which form and, if applicable, at which conditions an agreement between the parties will be reached is open and will depend on the course of the forthcoming discussions,” Covestro said in a statement on Saturday.

Reuters in August reported that the Abu Dhabi energy company indicated to Covestro that it may raise its informal offer to €60 ($64) conditional on the German company entering formal talks.

That non-binding offer will value Covestro at €11.6 billion.

Adnoc in June made a non-binding offer for Covestro of €55 per share, which was rejected.

“The interest of Adnoc in our company underlines our strong position as one of the world’s leading manufacturers of high-quality polymer materials and as a leader in the shift towards a circular economy,” Markus Steilemann, CEO of Covestro, said.

“Regardless of the talks with Adnoc, we will remain fully focused on pursuing our successful ‘sustainable future’ strategy in order to unfold our full potential and further drive the transformation towards the circular economy,” he added.

The German company’s second-quarter sales fell to €3.7 billion, a 20 percent decline year on year. Earnings before interest, taxes, depreciation and amortisation slipped 30 percent annually to €385 million.

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