Covestro Pours Millions into Green Tech Even as Shareholders Brace for Exit

Covestro announces its largest energy-efficiency project while facing a shareholder squeeze-out vote at €59.46 per share, sparking legal challenges.

With its delisting just a vote away, Covestro is giving the market a reminder that its industrial operations are still very much alive. The company has unveiled its largest energy-efficiency project to date at its Dormagen site: a steam compressor that will slash annual CO? emissions by more than 40,000 tonnes. The investment is in the low double-digit millions, with construction set to start by the end of this year and commissioning scheduled for mid-2027. The compressor works like a heat pump, raising the temperature and pressure of steam from TDI production so it can be reused, saving a low triple-digit GWh of energy each year. That translates into a two percent cut in Covestro’s German energy demand compared with 2025 levels.

Yet for shareholders, next Tuesday’s annual general meeting will be a far more immediate focus. That is when the squeeze-out of remaining minority investors goes to a vote. The bar has been set by a cash compensation of €59.46 per share, which sits €2.54 below the original takeover offer of €62. The gap is small in absolute terms but large enough to spark legal challenges. PwC calculated the compensation using an earnings-based valuation, and the discrepancy may partly reflect the €1.17 billion that flowed into Covestro through XRG’s capital increase at closing. Anyone who did not tender their shares at the higher bid will now receive less, opening the door to a fairness dispute.

A so-called Spruchverfahren – a court review of the compensation’s adequacy – remains possible after the squeeze-out is completed. The law firm ARENDTS ANWÄLTE has already said it will represent minority shareholders, making a legal battle more than a theoretical risk. The payout itself will be processed automatically once the transfer resolution is registered in the commercial register. Deutsche Bank has guaranteed the payment, and interest will accrue from the date of registration.

Operationally, Covestro is navigating a tough stretch. Revenues dropped 8.7 percent to €12.9 billion, EBITDA fell nearly 31 percent, and the company posted a net loss of €644 million. Free operating cash flow was negative at €283 million. Management sees no quick rebound in 2026, citing overcapacity, pricing pressure, and a more aggressive trade environment. The STRONG efficiency program is being pushed to cut costs further.

Strategically, the integration into XRG’s structure is taking shape. With the founding of Borouge Group International AG, expected to be completed by 31 March 2026, a larger chemicals conglomerate will emerge. Covestro is slated to serve as the specialty chemicals platform within that group.

The stock market has already priced in the squeeze-out scenario with remarkable precision. On Friday, Covestro shares closed at €59.60, down 0.33 percent, while the 30-day annualized volatility stood at just 1.78 percent. That leaves almost no room for chart-based trading – any meaningful price move would likely signal fresh legal or procedural uncertainty rather than operational news. For the minority holders still on board, the only question left is whether that €2.54 gap will eventually be closed by a court order.