— By Plasteurope.com staff — 

The European Commission has launched an in-depth investigation into the planned takeover of German plastics manufacturer Covestro (Leverkusen; www.covestro.com) by Emirati state-owned company Abu Dhabi National Oil Company (Adnoc, Abu Dhabi; www.adnoc.ae). The Commission is concerned that subsidies granted by the UAE could distort the EU’s internal market.

The subsidies included an unlimited guarantee from the UAE and a promised capital increase for Covestro. Other, non-subsidised investors may not have been able to compete and were therefore deterred from making an offer. This may have enabled Adnoc to acquire Covestro at a valuation and on financial terms that are not in line with market conditions. The Commission also expressed concerns about the impact of the acquisition on competition in the EU.

Including the assumption of liabilities and the planned capital increase of just under EUR 1.2 bn, the Covestro deal costs a total of EUR 16 bn. The transaction was notified to the Commission on 15 May. The Commission now has 90 working days, i.e. until 2 December, to take a decision.