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Covestro 1COV.DE said on Tuesday its management board is likely to recommend Abu Dhabi National Oil Company's (ADNOC) $16.3 billion takeover offer to shareholders in the next few weeks, as the German chemicals maker also cut its 2024 profit target again.
ADNOC said early this month it had struck a deal to buy Covestro for 14.7 billion euros ($16.3 billion), including debt, in the energy giant's biggest ever acquisition.
Covestro has until Nov. 27 to accept the offer.
"Subject to the review of the Offer Document, the Board of Management and the Supervisory Board of Covestro assume that they will recommend the acceptance of the Offer to the shareholders of the Company," Covestro said in a statement. It will issue a statement on the takeover offer "in the next two weeks".
Following completion of the deal, it is possible that ADNOC delists the German company, Covestro CFO Christian Baier told Reuters.
The deal is one of the largest foreign takeovers by a Gulf state as countries in the region seek to reduce their dependence on oil amid the global switch to cleaner energy.
The German group, whose main products include foam chemicals used in mattresses, car seats and insulation for buildings, cut its 2024 core profit target for the second time this year, to between 1 billion and 1.25 billion euros, saying global demand remained subdued.
Covestro had previously forecast its 2024 earnings before interest, tax, depreciation and amortisation (EBITDA) at 1 billion to 1.4 billion euros.
The company's EBITDA rose 3.6% to 287 million euros during July-September, but slightly missed analysts' average estimate of 292 million euros in a company-provided consensus.
Covestro's third-quarter sales came in at 3.60 billion euros, up 1% from last year, but below the consensus of 3.68 billion euros.
($1 = 0.9250 euros)
(Reporting by Bartosz Dabrowski and Patricia Weiss; Editing by Sherry Jacob-Phillips, Subhranshu Sahu and Susan Fenton)