State oil giant Abu Dhabi National Oil Co has increased its buyout offer for Covestro AG to around 11 billion euros ($12.3 billion), a person familiar with the proposal told Reuters on Tuesday.

ADNOC's latest bid values Covestro at about 57 euros per share, the person said, up from a mid-50 euro per share range.

Covestro had rejected ADNOC's initial takeover proposal last month, saying the offer was too low.

A Covestro spokesperson declined to comment, while ADNOC did not immediately respond to a Reuters request for comment.

A combination with Covestro would give energy giant ADNOC, also a maker of refined products and petrochemicals, access to more advanced materials that go into electric vehicles, thermal insulation for buildings as well as coatings, adhesives and engineering plastics.

The move would also support Abu Dhabi's plans to diversify its economy away from energy.

The news was first reported by Bloomberg News. ($1 = 0.8913 euros)

(Reporting by Chandni Shah and Nilutpal Timsina in Bengaluru; Editing by Shailesh Kuber)