Photo: Dormagen is the largest and one of the most modern Covestro sites in Germany | Credit: Covestro

Deal Completion and Regulatory Clearance

On November 21, 2025, XRG received the final regulatory approvals from both the German Federal Ministry for Economic Affairs and Energy under Germany's foreign direct investment regime and the European Commission under the EU Foreign Subsidies Regulation. The transaction, which had been under intense scrutiny for nearly a year across multiple EU review processes, closed within days of receiving these final clearances.​

The deal represents ADNOC's largest acquisition to date and one of the most significant foreign takeovers of an EU company by a Gulf state. The acquisition was executed through ADNOC International Germany Holding AG, a wholly-owned indirect subsidiary of XRG.​

Regulatory Scrutiny and Approval Process

The transaction faced extensive regulatory examination across multiple dimensions. In May 2025, the European Commission granted unconditional antitrust approval, determining that no competition concerns existed because the companies operate in different segments of the chemicals supply chain. However, in July 2025, the Commission opened an in-depth investigation under the EU Foreign Subsidies Regulation to assess whether financial support from the UAE provided XRG an unfair advantage over other potential bidders.​

To address EU concerns about state subsidies potentially stifling competition, ADNOC offered commitments including amendments to its articles of association addressing an unlimited state guarantee and pledges to maintain Covestro's intellectual property within Europe. Most notably, ADNOC committed to providing clear, pre-defined access to key Covestro patents in the field of sustainability, allowing market participants to continue innovating in areas critical for Europe's future.​

Strategic Rationale and Platform Integration

The Covestro acquisition represents a cornerstone of XRG's strategy to become a top-three global chemicals investor. Covestro will serve as the foundational platform for XRG's Performance Materials and Specialty Chemicals business, adding substantial scale through 46 production sites, 13 research and development centers, and approximately 17,500 employees worldwide.​

Covestro produces over 10,000 polymer materials used across mobility, electronics, construction, renewable energy, healthcare, and other industries central to the global economy and energy transition. The company generated sales of €14.2 billion in fiscal year 2024. Its products range from lightweight polymers that strengthen electric vehicles and wind turbine blades to high-performance films protecting semiconductors and smartphones, and specialized coatings for eyeglass lenses and passports.​

Dr. Rainer Seele, President of Global Chemicals at XRG, emphasized that "this acquisition strengthens XRG's international footprint in chemicals and supports our ambition to become a top three global investor in the sector."​

Operational Continuity and Investment Commitment

Under the terms of the investment agreement, Covestro will retain its autonomy and corporate structure, remaining headquartered in Leverkusen, Germany, with its existing management team led by CEO Dr. Markus Steilemann continuing to oversee operations and strategic direction. All existing employee agreements, including collective bargaining and co-determination structures, will be maintained.​

Following completion of the transaction, Covestro will receive a €1.17 billion capital increase to support strategic investments and advance its "Sustainable Future" strategy. The partnership focuses on accelerating digital transformation through advanced technologies such as artificial intelligence and quantum computing, scaling circular economy solutions, and strengthening activities in high-growth sectors.​

Dr. Steilemann welcomed the acquisition as "an exciting new chapter for Covestro," stating that "with XRG as a strong and long-term-oriented partner, we will drive innovation and digital transformation, scale circular solutions, and set new standards in the chemical industry."

Sources: This article was researched and compiled using information from official press releases and regulatory filings from XRG, ADNOC, and Covestro; reports from leading energy and business news outlets including Reuters, Gulf News, Arabian Business, and World Oil; official communications from the European Commission and German regulatory authorities; and statements from company executives and government officials regarding the transaction's approval and completion.