Covestro AG, a leading German producer of high-quality polymer materials, has agreed to a takeover offer from Abu Dhabi National Oil Company (ADNOC). The offer, set at €62.00 per share, values Covestro at approximately €11.7 billion. This price represents a 54% premium over Covestro’s share value before any media speculation about the potential deal. The company, with sales of €14.4 billion in fiscal year 2023 and approximately 17,500 employees across 48 production sites worldwide, has been actively pursuing sustainability goals, aiming for climate neutrality in its Scope 1 and Scope 2 emissions by 2035 and Scope 3 emissions by 2050.
Under the Investment Agreement, which runs until the end of 2028, ADNOC commits to fully supporting Covestro’s “Sustainable Future” strategy, focusing on circular economy principles and climate neutrality. Upon completion of the transaction, Covestro plans to issue new shares amounting to 10% of its capital to ADNOC International Germany Holding AG through a capital increase, generating proceeds of €1.17 billion. The partnership with ADNOC is expected to bolster Covestro’s efforts in developing materials that support a circular economy and reduce environmental impact.
Dr. Markus Steilemann, CEO of Covestro, commented: “We are convinced that the agreement reached today with ADNOC International is in the best interest of Covestro, our employees, our shareholders, and all other stakeholders. With ADNOC International’s support, we will have an even stronger foundation for sustainable growth in highly attractive sectors and can make an even greater contribution to the green transformation.”
His Excellency Dr. Sultan Ahmed Al Jaber, ADNOC Managing Director and Group CEO, stated: “This strategic partnership is a natural fit and aligns seamlessly with ADNOC’s ongoing smart growth and future-proofing strategy and our vision to become a top five global chemicals company. It represents a pivotal step for both organizations and embodies our disciplined approach to investing in strategic assets that drive long-term value.”
The agreement includes assurances from ADNOC to maintain Covestro’s existing business operations and governance structures. ADNOC agrees to retain the co-determined Supervisory Board and uphold current labor agreements and collective bargaining arrangements. The company also commits to not initiating significant reductions, closures, or sales of Covestro’s business activities following the takeover.
Industry Consolidation and Growth in Additive Manufacturing
Nano Dimension Ltd. announced its agreement to acquire Markforged Holding Corporation in an all-cash transaction valued at approximately $115 million. Nano Dimension will purchase all outstanding shares of Markforged at $5.00 per share, representing a 71.8% premium over Markforged’s volume-weighted average price as of September 24, 2024. The acquisition aims to consolidate Nano Dimension’s position in additive manufacturing, particularly in metal and composite 3D printing technologies. The combined company’s revenue, based on fiscal year 2023 figures, is projected to reach $340 million, providing a clearer path to profitability.
However, despite such high-profile mergers, the industry remains largely fragmented. Michael Petch, Editor-in-Chief of 3D Printing Industry, recently conducted an in-depth analysis in his article Is the 3D printing industry consolidating? Where he calculates that even with recent mergers, the top companies hold less than 20% of the market share. This places the industry in the “emergent” phase of the consolidation curve, characterized by numerous small companies, low entry barriers, and high levels of innovation. The analysis suggests that while strategic acquisitions are occurring, they have not significantly altered the industry’s overall structure, leaving ample room for innovation and growth among a diverse set of players.
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