Latest news with #foreignsubsidies
Zawya
20 hours ago
- Business
- Zawya
ADNOC's Covestro deal in EU crosshairs over subsidies
BRUSSELS: Abu Dhabi state oil giant ADNOC's 14.7 billion euro ($17.2 billion) bid for German chemicals company Covestro may face hurdles after EU antitrust regulators opened an investigation on Monday. ADNOC struck the deal to buy Covestro last October, marking its biggest ever acquisition and one of the largest foreign takeovers of an EU company by a Gulf state. The European Commission, which has been reviewing the deal under its foreign subsidies rules since May, opened an in-depth investigation on Monday, warning that subsidies granted by the United Arab Emirates could distort the EU internal market. The Commission, which acts as the EU competition enforcer, said the possible foreign subsidies include an unlimited guarantee from the UAE, as well as a committed capital increase by ADNOC into Covestro. The EU investigation will also look into possible negative effects in the internal market resulting from the merged company's activities once the deal is concluded. ADNOC said it disagreed with the Commission's preliminary findings. It said it was "confident that when the facts are fully examined there will be no reason to hold up clearance of a transaction that will add great value for all stakeholders and stimulate European industry". "XRG and Covestro remain in constructive discussions with the European Commission and are cooperating to conclude the FSR review," Covestro said in a statement. XRG is the international investment arm of ADNOC. The Commission set a December 2 deadline for its decision on the deal. UAE telecoms group e& secured EU approval to buy parts of Czech telecoms company PPF last year after agreeing to scrap an unlimited state guarantee and not to channel foreign subsidies to the activities of the merged company in the EU. ($1 = 0.8569 euros) (Reporting by Bart Meijer. Additional reporting by Patricia Weiss in Frankfurt and Bartosz Dabrowski in Gdansk. Editing by Louise Heavens, Mark Potter and Jan Harvey)
Reuters
a day ago
- Business
- Reuters
ADNOC's Covestro deal in EU crosshairs over subsidies
BRUSSELS, July 28 (Reuters) - Abu Dhabi state oil giant ADNOC's 14.7 billion euro ($17.2 billion) bid for German chemicals company Covestro ( opens new tab may face hurdles after EU antitrust regulators opened an investigation on Monday into potential distortions caused by foreign subsidies. ADNOC struck the deal to buy Covestro last October, marking its biggest ever acquisition and one of the largest foreign takeovers of an EU company by a Gulf state. The European Commission, which has been reviewing the deal under its foreign subsidies rules since May, opened an in-depth investigation on Monday, warning that subsidies granted by the United Arab Emirates could distort the EU internal market. The Commission, which acts as the EU competition enforcer, said the possible foreign subsidies include an unlimited guarantee from the UAE, as well as a committed capital increase by ADNOC into Covestro. "ADNOC may have offered an unusually high price and other favourable conditions, which may have deterred other investors from making an offer," it said in a statement. The EU investigation will also look into possible negative effects in the internal market resulting from the merged company's activities once the deal is concluded. ADNOC said it disagreed with the Commission's preliminary findings. It said it was "confident that when the facts are fully examined there will be no reason to hold up clearance of a transaction that will add great value for all stakeholders and stimulate European industry". "XRG and Covestro remain in constructive discussions with the European Commission and are cooperating to conclude the FSR review," Covestro said in a statement. XRG is the international investment arm of ADNOC. The Commission set a December 2 deadline for its decision on the deal. The EU's Foreign Subsidies Regulation (FSR) focuses on unfair foreign aid for companies in a bid to rein in unfair competition from non-EU companies subsidised by their governments. UAE telecoms group e& ( opens new tab secured EU approval to buy parts of Czech telecoms company PPF last year after agreeing to scrap an unlimited state guarantee and not to channel foreign subsidies to the activities of the merged company in the EU. ($1 = 0.8569 euros)
Khaleej Times
a day ago
- Business
- Khaleej Times
Adnoc contests European Commission probe into Covestro takeover bid
Adnoc has contested the European Commission's investigation into its takeover bid for German chemical firm Covestro, saying that the transaction will add value for all stakeholders. The European Commission on Monday opened an in-depth investigation to assess, under the Foreign Subsidies Regulation ('FSR'), the acquisition by Adnoc of Covestro. 'The Commission has preliminary concerns that foreign subsidies granted by the UAE could distort the EU internal market,' the Commission said in a statement. The possible foreign subsidies notably include an unlimited guarantee from the UAE, as well as a committed capital increase by Adnoc into Covestro, the Commission said. 'The Commission has preliminary concerns that the foreign subsidies may have enabled Adnoc to acquire Covestro at a valuation and financial terms that would not be in line with market conditions, and which could not have been matched by unsubsidised investors,' the statement added. A spokesperson for Adnoc said: 'Adnoc has a proven track record in value creation and driving opportunities for growth built on long-term and mutually beneficial partnerships. While we respect the European Commission's process, we contest the preliminary findings of the Commission and are confident that when the facts are fully examined, there will be no reason to hold up clearance of a transaction that will add great value for all stakeholders and stimulate European industry.' According to the FSR, companies must notify concentrations to the Commission when at least one of the merging companies, the acquired company or the joint venture is established in the EU and generates an EU turnover of at least €500 million, and when the parties were granted at least €50 million in combined aggregate foreign financial contributions from third countries in the three years prior to the concentration. Covestro accepted a bid — valuing the company at €12 billion ($14 billion) — from the Adnoc in October, Reuters reported. The acquisition came as Germany's key chemicals sector, which makes up around five percent of the country's GDP, has been gripped by crisis. Adnoc promised to inject around 1.2 billion euros into the chemicals firm through the issuance of new shares under the terms of the takeover.
Zawya
a day ago
- Business
- Zawya
ADNOC's Covestro buy may be boosted by foreign subsidies, EU warns
Abu Dhabi state oil giant ADNOC's 14.7 billion euro ($17.2 billion) bid for German chemicals company Covestro may face hurdles after EU antitrust regulators opened an investigation on Monday into potential distortions caused by foreign subsidies. ADNOC struck the deal to buy Covestro last October, marking its biggest ever acquisition and one of the largest foreign takeovers of an EU company by a Gulf state. The European Commission, which has been reviewing the deal under its foreign subsidies rules since May, opened an in-depth investigation on Monday, warning that subsidies granted by the United Arab Emirates could distort the EU internal market. The Commission, which acts as the EU competition enforcer, said the possible foreign subsidies include an unlimited guarantee from the UAE, as well as a committed capital increase by ADNOC into Covestro. "ADNOC may have offered an unusually high price and other favourable conditions, which may have deterred other investors from making an offer," it said in a statement. The EU investigation will also look into possible negative effects in the internal market resulting from the merged company's activities once the deal is concluded. "XRG and Covestro remain in constructive discussions with the European Commission and are cooperating to conclude the FSR review," the German company said in a statement. XRG is the international investment arm of ADNOC. The Commission set a December 2 deadline for its decision on the deal. The EU's Foreign Subsidies Regulation (FSR) focuses on unfair foreign aid for companies in a bid to rein in unfair competition from non-EU companies subsidised by their governments. UAE telecoms group e& secured EU approval to buy parts of Czech telecoms company PPF last year after agreeing to scrap an unlimited state guarantee and not to channel foreign subsidies to the activities of the merged company in the EU. ($1 = 0.8569 euros) (Reporting by Bart Meijer. Additional reporting by Patricia Weiss in Frankfurt and Bartosz Dabrowski in Gdansk. Writing by Foo Yun Chee. Editing by Louise Heavens and Mark Potter)
Reuters
a day ago
- Business
- Reuters
EU opens in-depth probe into ADNOC's Covestro deal over subsidies
BRUSSELS, July 28 (Reuters) - Abu Dhabi state oil giant ADNOC's 14.7 billion euro ($17.2 billion) bid for German chemicals company Covestro ( opens new tab may face hurdles after EU antitrust regulators opened an investigation on Monday into potential distortions caused by foreign subsidies. ADNOC struck the deal to buy Covestro last October, marking its biggest ever acquisition and one of the largest foreign takeovers of an EU company by a Gulf state. The European Commission, which has been reviewing the deal under its foreign subsidies rules since May, opened an in-depth investigation on Monday, warning that subsidies granted by the United Arab Emirates could distort the EU internal market. The Commission, which acts as the EU competition enforcer, said the possible foreign subsidies include an unlimited guarantee from the UAE, as well as a committed capital increase by ADNOC into Covestro. "ADNOC may have offered an unusually high price and other favourable conditions, which may have deterred other investors from making an offer," it said in a statement. The EU investigation will also look into possible negative effects in the internal market resulting from the merged company's activities once the deal is concluded. "XRG and Covestro remain in constructive discussions with the European Commission and are cooperating to conclude the FSR review," the German company said in a statement. XRG is the international investment arm of ADNOC. The Commission set a December 2 deadline for its decision on the deal. The EU's Foreign Subsidies Regulation (FSR) focuses on unfair foreign aid for companies in a bid to rein in unfair competition from non-EU companies subsidised by their governments. UAE telecoms group e& ( opens new tab secured EU approval to buy parts of Czech telecoms company PPF last year after agreeing to scrap an unlimited state guarantee and not to channel foreign subsidies to the activities of the merged company in the EU. ($1 = 0.8569 euros)
