Covestro reportedly offered 60 Euros per share in takeover talks

Abu Dhabi, UAE – Oilprice.com is reporting that Abu Dhabi National Oil Co (ADNOC) has signaled a willingness to raise its informal offer to 60 euros per share for a valuation of $12.6 billion for German plastics and chemicals maker Covestro. The latest offer would represent a premium of nearly 30% to Covestro’s closing share price. ADNOC last raised its informal offer to 57 euros per share in July, although no final decision has yet been made.

“It’s been a pretty dramatic downturn. With chemicals oversupplied right now, large oil companies will find other areas to invest in,” Joseph Chang, a New York-based analyst at ICIS, has told Bloomberg.

Over the past decade, Big Oil has relied on petrochemicals as a growth engine, acting as a hedge when oil and gas prices drop and a long-term growth driver in the transition to clean energy. Previously, several Wall Street analysts predicted that oil demand will actually grow over the coming decades primarily driven by petrochemicals demand growth. Indeed, Energy Intelligence is not the only bull here. No less than 10 organizations, including OPEC, Exxon Mobil Corp., and the Energy Information Administration (EIA), have predicted that global oil demand will actually grow over the next few decades and not shrink as most analysts have forecast.