The European Commission has opened an investigation into the €12 billion acquisition of German chemical firm Covestro by Abu Dhabi National Oil Company (ADNOC), raising concerns over potential market distortion from foreign subsidies.
In a statement Monday, the Commission said it was concerned that financial support from the United Arab Emirates may have unfairly influenced the deal and could undermine EU market competition.
The probe, to be concluded by December 2, will assess whether UAE subsidies helped ADNOC outbid competitors and secure favorable investment terms in Covestro, which is vital to Germany’s struggling chemicals sector.
Under the acquisition terms, ADNOC is expected to inject €1.2 billion into Covestro via new shares. The Leverkusen-based firm, spun off from Bayer in 2015, had earlier announced plans to cut costs by €400 million amid declining demand and high energy prices.
