Takeover Offer of Covestro by ADNOC International, now XRG, Successful: C. 70% Acceptance

Market Release

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION (IN WHOLE OR IN PART) IN, INTO OR FROM ANY OTHER JURISDICTION WHERE TO DO SO WOULD VIOLATE THE LAWS OF SUCH JURISDICTION

Takeover Offer of Covestro by ADNOC International, now XRG, Successful: C. 70% Acceptance

• ADNOC International, now XRG, will become the new majority shareholder of Covestro AG holding c. 70%, subject to outstanding regulatory approvals.
• Additional acceptance period starts on December 3, 2024, allowing shareholders to accept the offer until December 16, 2024.
• Transaction marks another key milestone in XRG’s growth strategy (formerly known as ADNOC International).

Abu Dhabi, UAE | Frankfurt, Germany – December 2, 2024: ADNOC International Germany Holding AG (the “Bidder”), a wholly owned indirect subsidiary of XRG P.J.S.C. (formerly known as ADNOC International Limited, together with the Bidder and other companies of ADNOC Group “XRG”), today announced that the minimum acceptance threshold of 50% plus one share as set out in the voluntary public takeover offer (the “Takeover Offer”) to all shareholders of Covestro AG (“Covestro” or the “Company”) was exceeded by the end of the initial acceptance period on November 27, 2024, at 24:00 hrs (Frankfurt am Main local time) / 18:00 hrs (New York local time). The aggregate of the shares tendered during the initial acceptance period and the shares purchased by XRG amount to c. 69.94% of the total shares outstanding of Covestro.

Shareholders, who have not tendered their shares, can still accept the offer during the additional acceptance period, which runs until December 16, 2024, at 24:00 hrs (Frankfurt am Main local time) / 18:00 hrs (New York local time). This is the final period until which Covestro shareholders can still benefit from and accept the Takeover Offer. The Bidder intends to announce the final result of the offer after the expiry of the additional acceptance period on December 19, 2024.

In their joint reasoned statement, published on November 7, 2024, the Board of Management and Supervisory Board of Covestro recommended that shareholders accept the Takeover Offer.

As the new future majority shareholder of Covestro AG, XRG is on track to becoming a top five global chemicals player, marking a significant milestone in its international growth strategy.

The closing of the Takeover Offer is still subject to further regulatory conditions, including merger control, foreign investment control, and EU Foreign Subsidies Regulation clearances, which are set forth in the Offer Document in relation to the Takeover Offer (the “Offer Document”). XRG is now fully focused on fulfilling these remaining conditions, with the transaction expected to close in H2 2025.

Following the successful closing of the Takeover Offer, the Board of Management of Covestro has agreed to support, subject to its fiduciary duties, a delisting of Covestro and/or a squeeze-out if XRG intends to execute either. The Bidder has undertaken vis-à-vis Covestro not to enter into a domination and/or profit and loss transfer agreement (Beherrschungs- und/oder Gewinnabführungsvertrag) during the term of the Investment Agreement, which expires on December 31, 2028. 

The Offer Document and other information pertaining to the Takeover Offer (in both English and German language) are available at www.covestro-offer.com.

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Notes to Editors

• XRG (formerly known as ADNOC International) holds assets and investments across sectors spanning energy, chemicals, and low-carbon solutions globally.
• XRG P.J.S.C. is a wholly owned subsidiary of Abu Dhabi National Oil Company (ADNOC) P.J.S.C. and replaced ADNOC International Limited by way of universal legal succession.
• XRG is short for Exergy, it means the maximum useful energy, or the potential of energy.

About XRG

XRG is an international low-carbon energy and chemicals investment company, headquartered in Abu Dhabi. Wholly owned by ADNOC, XRG has an enterprise value of over $80 billion and an ambition to double its value by 2035. Its portfolio includes interests in industry-leading companies that are meeting rapidly increasing global demand for lower carbon energy and the chemicals that are essential building blocks for products central to modern life.

To find out more, visit: www.XRG.ae.

Contact

Oliver Thompson
Vice President, Financial Communications
media@adnoc.ae

Important notice

This announcement constitutes neither an offer to purchase nor a solicitation of an offer to sell Covestro Shares. The final terms of the Takeover Offer as well as other provisions relating to the Takeover Offer are set out in the Offer Document as approved for publication by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht). Investors and holders of Covestro Shares are strongly advised to read the Offer Document and all other documents relating to the Takeover Offer, as they contain important information.

The Takeover Offer is implemented exclusively on the basis of the applicable provisions of German law, in particular the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz - WpÜG), and certain securities law provisions of the United States of America. The Takeover Offer is not conducted in accordance with the legal requirements of jurisdictions other than the Federal Republic of Germany or the United States of America (as applicable). Accordingly, no notices, filings, approvals, or authorizations for the Takeover Offer have been filed, caused to be filed or granted outside the Federal Republic of Germany or the United States of America (as applicable). Investors and holders of Covestro Shares cannot rely on being protected by the investor protection laws of any jurisdiction other than the Federal Republic of Germany or the United States of America (as applicable). This announcement may not be released or otherwise distributed in whole or in part, in any jurisdiction in which the Takeover Offer would be prohibited by applicable law.

The Bidder reserves the right, to the extent permitted by law, to directly or indirectly acquire additional Covestro Shares outside the Takeover Offer on or off the stock exchange, provided that such acquisitions or arrangements to acquire shares are not made in the United States of America and will comply with the applicable German statutory provisions. The Takeover Offer published in this announcement relates to shares in a German company admitted to trading on the Frankfurt Stock Exchange and are subject to the disclosure requirements, rules and practices applicable to companies listed in the Federal Republic of Germany, which differ from those of the United States of America and other jurisdictions in certain material respects.

Any contract entered into with the Bidder as a result of the acceptance of the Takeover Offer will be governed exclusively by and construed in accordance with the laws of the Federal Republic of Germany. It may be difficult for shareholders from the United States of America (or from elsewhere outside of Germany) to enforce certain rights and claims arising in connection with the Takeover Offer under United States of America federal securities laws (or other laws they are acquainted with) since the Bidder and the Company are located outside the United States of America (or the jurisdiction where the shareholder resides), and their respective officers and directors reside outside the United States of America (or the jurisdiction where the shareholder resides). It may not be possible to sue a non-United States of America company or its officers or directors in a non-United States of America court for violations of United States of America securities laws. It also may not be possible to compel a non-United States of American company or its subsidiaries to submit themselves to a United States of America court’s judgment.

To the extent that this document contains forward-looking statements, they are not statements of fact and are identified by the words “intend”, “will” and similar expressions. These statements express the intentions, beliefs or current expectations and assumptions of the Bidder and the persons acting jointly with it. Such forward-looking statements are based on current plans, estimates, and projections made by the Bidder and the persons acting jointly with it to the best of their knowledge, but are not guarantees of future accuracy (this applies in particular to circumstances beyond the control of the Bidder or the persons acting jointly with it). Forward-looking statements are subject to risks and uncertainties, most of which are difficult to predict and are usually beyond the Bidder's control or the control of the persons acting jointly with it. It should be taken into account that actual results or consequences in the future may differ materially from those indicated or contained in the forward-looking statements. It cannot be ruled out that the Bidder and the persons acting jointly with it will in future change their intentions and estimates stated in documents or notifications or in the Offer Document published hereby.