- The EU Commission is investigating ADNOC's acquisition of Covestro under the Foreign Subsidies Regulation.
- The investigation focuses on potential UAE subsidies affecting market conditions and competition.
- The transaction was notified on 15 May 2025, with a decision due by 2 December 2025.
- Covestro specializes in high-performance polymers and components.
Investigation Overview
The European Commission has launched an in-depth investigation into the acquisition of Covestro by ADNOC, under the Foreign Subsidies Regulation (FSR). The focus is on potential foreign subsidies from the UAE that could distort the EU internal market.
Concerns and Focus Areas
The Commission's preliminary concerns include the possibility of an unlimited guarantee from the UAE and a committed capital increase by ADNOC into Covestro. These subsidies may have allowed ADNOC to acquire Covestro at non-market conditions, potentially deterring other investors and impacting competitive conditions in the EU market.
Investigation Timeline
The transaction was notified to the Commission on 15 May 2025. The Commission has 90 working days, until 2 December 2025, to reach a decision. The investigation will assess whether the foreign subsidies distorted the acquisition process and could lead to negative effects in the internal market post-transaction.
Foreign Subsidies Regulation
The FSR, effective from 12 July 2023, allows the Commission to address market distortions caused by foreign subsidies. Companies must notify the Commission of concentrations when certain financial thresholds are met. The Commission may accept commitments to remedy distortions, prohibit the concentration, or issue a no-objection decision.
