Adnoc has opposed the European Commission’s probe into its acquisition offer for German chemical manufacturer Covestro, claiming that the merger will benefit all stakeholders.
The European Commission launched an in-depth investigation on Monday under the Foreign Subsidies Regulation (‘FSR’) into Adnoc’s acquisition of Covestro. “The Commission has preliminary concerns that foreign subsidies granted by the UAE could distort the EU internal market,” according to a statement.
The Commission stated that the proposed foreign subsidies include an unrestricted guarantee from the UAE and a committed capital increase by Adnoc into Covestro. “The Commission has preliminary concerns 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,” said the statement.
A spokeswoman for Adnoc stated, “Adnoc has a proven track record of creating value and driving growth opportunities through long-term and mutually beneficial partnerships.” While we respect the European Commission procedure, we oppose the Commission’s preliminary findings.
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