Covestro and XRG Gain Final Approval to Launch Partnership

Covestro AG and XRG P.J.S.C. (formerly ADNOC International Limited, together with its subsidiaries in the following “XRG”) received the final outstanding regulatory approval from the German Federal Ministry for Economic Affairs and Energy under foreign investment rules for their strategic partnership. Thereby, all closing conditions of the transaction are fulfilled. The closing is expected to take place in the coming days. With this milestone, Covestro and XRG will embark on their joint journey to redefine the chemical industry through innovation, circularity, driving digital transformation, and strengthening the pioneering role in high-growth sectors.

“This is an exciting new chapter for Covestro,” said Dr. Markus Steilemann, CEO of Covestro. “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. Together, we are well-positioned to take our ‘Sustainable Future’ strategy to the next level. Our partnership reflects not only shared goals and ambitions for a successful future and a new chemical era but also mutual benefits and opportunities for both Covestro and XRG as well as for our customers, suppliers, employees, and all other stakeholders.”

Dr. Rainer Seele, President of Global Chemicals at XRG, said, “Securing these regulatory clearances allows us to move forward and focus on establishing a long-term, stable partnership with Covestro. This acquisition strengthens XRG’s international footprint in chemicals and supports our ambition to become a top three global investor in the sector. We have deep respect for Covestro’s people and expertise, and we look forward to working closely with its management team to realize the company’s full potential.”

Supporting Covestro’s ‘Sustainable Future’ Strategy

The partnership is built on a shared commitment to addressing powerful megatrends and shaping industries and societies worldwide. By combining XRG’s strength and global reach with Covestro’s expertise in advanced technologies and circular solutions, the two companies aim to unlock opportunities and deliver long-term value for all stakeholders. Upon closing, Covestro’s ongoing transformation will be further supported by a EUR 1.17 billion capital increase, which will enable the timely execution of strategic investment plans and further execution of its ‘Sustainable Future’ strategy.

With XRG as a long-term-oriented shareholder, Covestro will continue its journey, focusing on scaling its circular economy ambitions, driving digital transformation through advanced technologies such as AI and quantum computing, and strengthening its activities in high-growth sectors like mobility, construction, and electronics. XRG’s expertise in energy transition will complement Covestro’s sustainability goals, providing access to cleaner energy solutions and enhancing resilience in a rapidly changing global landscape.

A Strong Foundation for Long-Term Growth and Continuity

Key elements of the agreed strategic partnership include, inter alia, that Covestro, a global leader in high-quality polymer materials, will act as the foundational platform for XRG’s Performance Materials and Specialty Chemicals business. In accordance with the terms of the Investment Agreement, Covestro will retain its autonomy, with its Board of Management, led by CEO Dr. Markus Steilemann, continuing to oversee operational management and strategic direction. XRG will collaborate with Covestro’s management to identify further opportunities to enhance operational efficiency, strengthen resilience, and capture long-term value as the company enters this next phase. Also, in accordance with the terms of the Investment Agreement, upon closing, Covestro maintains its corporate structure, German corporate governance standards, and existing general works agreements, along with its registered headquarters in Leverkusen.