Latest news with #Covestro
Arabian Business
a day ago
- Business
- Arabian Business
European Commission to investigate ADNOC's acquisition of Covestro
The proposed US$15 billion acquisition of German chemical company Covestro by XRG, the international investment arm of Abu Dhabi National Oil Company (ADNOC) – the biggest acquisition ever by a Gulf company in Europe – will be delayed as the deal is now being investigated by the European Commission. The EC has opened an in-depth investigation to assess, under the Foreign Subsidies Regulation (FSR), the acquisition by ADNOC/XRG. The Commission said they were concerned that foreign subsidies granted by the UAE to the state-owned ADNOC 'could distort the EU internal market'. Covestro shareholders had given their go-ahead to XRG 's proposed deal in December 2024. EU probes ADNOC's Covestro takeover The Commission said that 'opening of an in-depth investigation does not prejudge the outcome of the investigation'. If the European Commission probe, which has a deadline of December 2 to issue a ruling, concludes that rules have been violated, the takeover could eventually be blocked unless ADNOC makes significant concessions. The Commission's preliminary investigation indicates that ADNOC and Covestro may receive foreign subsidies. The possible foreign subsidies include an unlimited guarantee from the UAE, as well as a committed capital increase by ADNOC into Covestro. The preliminary investigation felt that the foreign subsidies may have enabled ADNOC to acquire Covestro at a valuation and financial terms that would not be in line with market conditions, and which could not have been matched by unsubsidised investors. During its in-depth investigation, the Commission said it would assess… Whether the foreign subsidies that ADNOC may have received distorted the outcome of the acquisition process. ADNOC may have offered an unusually high price and other favourable conditions, which may have deterred other investors from making an offer. Whether such potential foreign subsidies may lead to negative effects in the internal market with respect to the merged entity's activities after the transaction.
Daily Tribune
a day ago
- Business
- Daily Tribune
EU probes UAE oil giant's purchase of Germany's Covestro
The European Commission yesterday announced an investigation into the takeover of German chemical firm Covestro by UAE state oil giant ADNOC, citing competition fears. "The commission has preliminary concerns that foreign subsidies granted by the United Arab Emirates could distort the EU internal market," a statement by the bloc's executive arm said. Plastics maker Covestro accepted a bid -- valuing the company at 12 billion euros ($14 billion) -- from the Abu Dhabi National Oil Company in October. The acquisition came as Germany's key chemicals sector, which makes up around five percent of the country's GDP, has been gripped by crisis. Brussels said it was investigating to see if subsidies from the UAE had allowed ADNOC to outbid competitors for the firm and would help it pump investments into Covestro that would skew the market. The commission said it would wrap up its probe and take a decision on any potential next steps by December 2. ADNOC promised to inject around 1.2 billion euros into the chemicals firm through the issuance of new shares under the terms of the takeover. Challenges facing Germany's energy-intensive chemicals industry show no signs of abating. Weak demand and high energy costs in the wake of the 2022 Russian invasion of Ukraine have weighed on producers and led them to cut back on production in Germany. Covestro, which makes chemicals used in everything from building insulation to electric vehicles, had unveiled a savings plan ahead of the takeover announcement last year.
Arabian Post
a day ago
- Business
- Arabian Post
EU Antitrust Probe Threatens ADNOC-Covestro Deal
Arabian Post Staff -Dubai Abu Dhabi National Oil Company faces significant challenges in its $17.2 billion bid for German chemicals company Covestro after the European Union's competition watchdog launched a full investigation into the acquisition. The deal, struck last October, was poised to be ADNOC's largest ever, as well as one of the most substantial foreign takeovers of a European Union-based company by a Gulf state. However, European regulators are concerned that the acquisition may distort the EU internal market due to potential subsidies granted by the United Arab Emirates to ADNOC, which could provide the state-owned oil giant with an unfair advantage. The European Commission's investigation, which was triggered earlier this week, specifically focuses on the possibility of foreign subsidies that could influence the competitive landscape within the EU. The Commission, which is tasked with safeguarding market competition within the EU, has expressed concerns that ADNOC's acquisition of Covestro could be significantly affected by the financial support ADNOC is receiving from the UAE. ADVERTISEMENT Among the subsidies under scrutiny are an unlimited guarantee provided by the UAE government and a capital injection into Covestro. The latter involves ADNOC committing substantial funding into the German company, which would significantly increase its capital base and, potentially, its market power. The Commission's investigation could ultimately delay or alter the terms of the deal depending on its findings. ADNOC, which has been aggressively expanding its portfolio and seeking new global opportunities, sees Covestro as an attractive addition to its investments, particularly as the German company holds a strong position in the global chemicals market. The chemicals sector is seen as a crucial area for growth, especially in industries like plastics and polyurethane, which have applications across numerous sectors, including automotive, construction, and electronics. By acquiring Covestro, ADNOC would be able to diversify its business beyond oil and gas, thus making it a more integrated player in the global economy. The issue of foreign subsidies in cross-border mergers and acquisitions has gained increasing attention in recent years, particularly with the growing influence of state-backed companies from non-EU countries. In 2020, the European Commission introduced new tools to assess foreign subsidies in mergers and acquisitions, with the aim of protecting the EU's internal market from potential distortions. The ADNOC-Covestro deal is the latest in a series of transactions under this scrutiny. The Commission's probe is particularly significant as it reflects broader concerns within the EU over the impact of state-backed companies from non-EU nations acquiring strategic European assets. Such concerns have been heightened by geopolitical tensions and the growing influence of countries like China, Russia, and the UAE, all of which have state-owned or state-supported companies engaging in high-profile international mergers and acquisitions. While ADNOC has yet to comment on the investigation, the company's bid to acquire Covestro highlights its ambitions to expand beyond the energy sector. ADNOC's foray into chemicals and materials is seen as part of its strategy to hedge against the global shift towards renewable energy and decarbonisation. The company is looking to solidify its place in the post-oil world by investing in value-added industries, thereby ensuring a diversified revenue stream. On the other hand, the European Commission's actions reflect its determination to maintain a level playing field in the market, ensuring that EU companies are not at a disadvantage when competing with state-backed enterprises from outside the bloc. The EU's foreign subsidies regulation, which came into force in 2020, provides the Commission with the authority to intervene in such cases, even when the potential subsidies do not directly involve EU-based companies. As the investigation unfolds, it remains unclear whether the Commission will clear the deal or impose conditions on it. If the deal goes ahead, it could set a significant precedent for future cross-border mergers involving foreign state-backed companies. Conversely, if the deal is blocked or altered significantly, it may send a strong message about the EU's stance on foreign subsidies and the influence of non-EU governments on its internal market.
Zawya
2 days ago
- Business
- Zawya
ADNOC's Covestro deal in EU crosshairs over subsidies
BRUSSELS: Abu Dhabi state oil giant ADNOC's 14.7 billion euro ($17.2 billion) bid for German chemicals company Covestro may face hurdles after EU antitrust regulators opened an investigation on Monday. ADNOC struck the deal to buy Covestro last October, marking its biggest ever acquisition and one of the largest foreign takeovers of an EU company by a Gulf state. The European Commission, which has been reviewing the deal under its foreign subsidies rules since May, opened an in-depth investigation on Monday, warning that subsidies granted by the United Arab Emirates could distort the EU internal market. The Commission, which acts as the EU competition enforcer, said the possible foreign subsidies include an unlimited guarantee from the UAE, as well as a committed capital increase by ADNOC into Covestro. The EU investigation will also look into possible negative effects in the internal market resulting from the merged company's activities once the deal is concluded. ADNOC said it disagreed with the Commission's preliminary findings. It said it was "confident that when the facts are fully examined there will be no reason to hold up clearance of a transaction that will add great value for all stakeholders and stimulate European industry". "XRG and Covestro remain in constructive discussions with the European Commission and are cooperating to conclude the FSR review," Covestro said in a statement. XRG is the international investment arm of ADNOC. The Commission set a December 2 deadline for its decision on the deal. UAE telecoms group e& secured EU approval to buy parts of Czech telecoms company PPF last year after agreeing to scrap an unlimited state guarantee and not to channel foreign subsidies to the activities of the merged company in the EU. ($1 = 0.8569 euros) (Reporting by Bart Meijer. Additional reporting by Patricia Weiss in Frankfurt and Bartosz Dabrowski in Gdansk. Editing by Louise Heavens, Mark Potter and Jan Harvey)
Auto Blog
2 days ago
- Automotive
- Auto Blog
Revolutionary New Tech Promises to Address EV Battery Fire Risks
By signing up I agree to the Terms of Use and acknowledge that I have read the Privacy Policy . You may unsubscribe from email communication at anytime. Two iconic Italian brands want to team up once again on a limited-run supercar. A concept will be shown in the next two months, and production will begin within two years. There's no wonder police departments use them. They're sleek, comfortable, spacious, and surprisingly powerful. But is it worth almost $60k? How Covestro's new foam aims to increase trust in EV safety Covestro, a leading producer of advanced polymers and high-performance plastics, has introduced an advanced flame-retardant encapsulation foam for electric vehicle (EV) batteries, enhancing their safety. The world's largest EV market, China, is introducing a new battery safety standard in July 2026, requiring that batteries must not catch fire or explode, even in the event of a thermal runaway. Covestro's battery encapsulation foam aligns with this upcoming national standard, which is expected to influence policies in other countries. The technology, named the Baysafe BEF flame-retardant encapsulation foam series, encases battery cells for protection from mechanical, electrical, and thermal risks with electrical and thermal barrier properties. Public EV chargers — Source: Getty Chemical improvements have enabled the foam to form exceptional adhesion to the battery components, resulting in high torsional stiffness and improved force transmission, resisting twisting forces and enabling even transfer of mechanical forces throughout the battery. Still, this technology's abilities aren't limited to minimizing heat spreading from a battery cell to an adjacent cell. It also promotes higher cell packing density, helping optimize EV range. Baysafe BEF encapsulation foam series' low viscosity and tailored kinetics enable the filling of cell gaps without air inclusions, and foam processing is adjusted to cycle time during production. In other words, the battery pack becomes tighter and more solid, with more cells in the same space, thereby increasing range without enlarging the pack. Facts about EV battery fires Concerns about EV battery fires remain relatively common among consumers. One of the most common causes of EV battery fires is damage to the battery pack, which typically stems from a crash. A collision can cause ruptured battery cells to heat up increasingly through chemical reactions, resulting in a thermal runaway that leads to a fire spreading to the rest of the vehicle. Thermal runaway occurs when chemical reactions replace the normal electrochemical reactions of an abused battery cell. These new chemical reactions produce heat and toxic and flammable gases, which can affect adjacent cells. EVs have been confirmed as less likely to catch fire than their internal combustion engine (ICE) counterparts, but when they do, extinguishing the flames can take hours and tens of thousands of gallons of water. Since individual lithium-ion battery cells undergoing thermal runaway are contained within multiple layers of metal, typically aluminum casings, applying water directly onto the fire's seat can be nearly impossible, according to EV Fire Safe. Since these fires take longer to extinguish than those from gas-powered vehicles, they tend to receive more coverage, resulting in some consumers perceiving EVs as more hazardous. Autoblog Newsletter Autoblog brings you car news; expert reviews and exciting pictures and video. Research and compare vehicles, too. Sign up or sign in with Google Facebook Microsoft Apple By signing up I agree to the Terms of Use and acknowledge that I have read the Privacy Policy . You may unsubscribe from email communication at anytime. Hawthorne, California Tesla charging station — Source: Getty Final thoughts Alongside consumer sentiments like range anxiety, EV battery fire dynamics are one of the most common factors dissuading drivers from going electric. However, most of this fear is due to a misunderstanding of EV battery fires and their likelihood. Covestro's new foam technology is designed to make these instances even rarer than they already are and also aligns with China's new battery safety standard starting July 2026, mandating that EV batteries can't catch fire or explode, even in the event of a thermal runaway. This standard is expected to expand to other countries, alongside China's growing EV manufacturing presence. About the Author Cody Carlson View Profile
