Germany's economy ministry has given the green light for specialty plastics manufacturer Covestro's takeover by the United Arab Emirates' state-owned energy company.
Covestro and XRG - the investment arm of the Abu Dhabi National Oil Company (ADNOC) - announced on Friday that "all closing conditions of the transaction are fulfilled" after the European Commission approved it last week.
Formerly Bayer’s plastics division before being spun off in 2015, Covestro produces chemicals used in rigid foams for refrigerators and freezers and flexible foams for products such as car seats and mattresses.
The company employs around 17,500 people worldwide, including roughly 7,000 at sites in Germany. Covestro’s management has welcomed the prospect of a new owner as the firm struggles with weak economic conditions, high energy costs and increased U.S. tariffs.
"This is an exciting new chapter for Covestro," said chief executive Markus Steilemann. "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."
XRG manager Rainer Seele said the company aims to become "a top three global investor in the sector."
The technical closing is expected in the coming days, which is a formality, before the takeover is completed.
German Economy Minister Katherina Reiche had previously announced on Monday that the deal was in its final stages, calling it a "huge step" for Covestro during a visit to Abu Dhabi.
