Adnoc's global energy investment arm XRG has secured a 95.1 per cent stake in German chemicals company Covestro, in what is the UAE state energy company's biggest-ever acquisition.
Adnoc International Germany Holding, a wholly-owned indirect subsidiary of XRG, holds a 83.43 per cent stake in Covestro, while XRG has a 11.68 per cent stake, the German company said in a regulatory filing to the Frankfurt Stock Exchange on Tuesday.
Adnoc had submitted a €14.7 billion ($17 billion) takeover proposal for Covestro in October last year. XRG, formed in November 2024, said a month later that it would become the majority shareholder of Covestro, after the German chemicals company’s shareholders accepted a takeover offer.
The proposal underwent scrutiny from the European Commission under its rules on foreign subsidies, and in September this year, regulators sought to obtain additional information from Adnoc. A month later, XRG submitted new proposals to address the commission's concerns.
On December 10, XRG said that it had completed its voluntary public takeover offer to the shareholders of Covestro. As part of the transaction, XRG completed a capital increase of €1.17 billion to boost Covestro’s balance sheet under the new ownership structure.
The acquisition “strengthens XRG’s international footprint in chemicals and supports our ambition to become a top three global investor in the sector”, Rainer Seele, president of global chemicals at XRG, said in a statement to The National.
Both companies will work “to realise [Covestro's] full potential”, he said.
XRG was launched as an international lower-carbon energy and chemicals investment company, with an enterprise value exceeding $80 billion.
The latest deal will enable XRG to tap into Covestro's portfolio, comprised of more than 10,000 specialty solutions, 46 production sites and 13 research and development centres.
Covestro's operations supports sectors such as mobility, construction, electronics, and healthcare, which are key to the global economy and energy transition. The company's products support production of electric vehicles, wind-turbine blades, semiconductors, smartphones and eyeglass lenses.
XRG has been actively increasing its operations globally and plans to double its asset value over the next decade, capitalising on the energy transition, artificial intelligence and the rise of emerging economies.
In November, XRG signed an initial agreement with Argentina’s YPF and Italy’s Eni to develop an integrated liquefied natural gas project in the South American nation. It also agreed to a non-binding agreement to acquire a stake in Azerbaijan's Southern Gas Corridor to support its regional strategy in the Caspian.
In September, XRG closed the acquisition of an 11.7 per cent stake in the first phase of the Rio Grande LNG project in Texas, which was XRG’s first natural gas investment in the US.
The same month, a consortium led by XRG also withdrew its offer to buy Santos, Australia's second-largest gas producer. The consortium, which included Abu Dhabi's sovereign wealth fund ADQ and global investment firm Carlyle, had made a $19 billion indicative offer to buy Santos in June.
Adnoc also said in September that it was transferring its equity stakes in its listed companies to XRG. The companies included in the transfer are Adnoc Distribution, Adnoc Drilling, Adnoc Gas and Adnoc Logistics and Services, all listed on the Abu Dhabi Securities Exchange. Adnoc also confirmed that its entire stake in Fertiglobe is now held through XRG.
In July, Adnoc said it planned to transfer its 24.9 per cent stake in Austrian energy company OMV to XRG. Adnoc and OMV agreed on terms in March to merge their polyolefins business and create a $60 billion global company.
They said the joint venture company, Borouge Group International, would combine Adnoc’s Borouge with OMV’s Borealis unit. Once complete, Adnoc's entire stake in BGI will be transferred to and held by XRG, the company said.
Avatar: Fire and Ash
Director: James Cameron
Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana
Rating: 4.5/5
Habib El Qalb
Assi Al Hallani
(Rotana)
As it stands in Pool A
1. Japan - Played 3, Won 3, Points 14
2. Ireland - Played 3, Won 2, Lost 1, Points 11
3. Scotland - Played 2, Won 1, Lost 1, Points 5
Remaining fixtures
Scotland v Russia – Wednesday, 11.15am
Ireland v Samoa – Saturday, 2.45pm
Japan v Scotland – Sunday, 2.45pm
UK’s AI plan
- AI ambassadors such as MIT economist Simon Johnson, Monzo cofounder Tom Blomfield and Google DeepMind’s Raia Hadsell
- £10bn AI growth zone in South Wales to create 5,000 jobs
- £100m of government support for startups building AI hardware products
- £250m to train new AI models
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Frankenstein in Baghdad
Ahmed Saadawi
Penguin Press
In-demand jobs and monthly salaries
- Technology expert in robotics and automation: Dh20,000 to Dh40,000
- Energy engineer: Dh25,000 to Dh30,000
- Production engineer: Dh30,000 to Dh40,000
- Data-driven supply chain management professional: Dh30,000 to Dh50,000
- HR leader: Dh40,000 to Dh60,000
- Engineering leader: Dh30,000 to Dh55,000
- Project manager: Dh55,000 to Dh65,000
- Senior reservoir engineer: Dh40,000 to Dh55,000
- Senior drilling engineer: Dh38,000 to Dh46,000
- Senior process engineer: Dh28,000 to Dh38,000
- Senior maintenance engineer: Dh22,000 to Dh34,000
- Field engineer: Dh6,500 to Dh7,500
- Field supervisor: Dh9,000 to Dh12,000
- Field operator: Dh5,000 to Dh7,000
COMPANY%20PROFILE
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