Covestro's Final Chapter: A Costly Exit for Minority Shareholders

Covestro reports steep losses in its last year before ADNOC takeover, with CEO exit and a shareholder vote on the squeeze-out payout set for May 2026.

As its acquisition by the Abu Dhabi National Oil Company (ADNOC) subsidiary XRG enters its final phase, Covestro is preparing to leave the public markets against a backdrop of severe operational distress. The German plastics manufacturer's 2025 financial results lay bare the intense pressures facing the chemical sector, shifting investor focus squarely onto the pending cash settlement for remaining shareholders.

Management Reshuffle Signals New Era

The impending change in ownership is being accompanied by a significant leadership transition. Chief Executive Officer Markus Steilemann will depart before his contract term concludes in 2028. A change is also scheduled for the Chief Financial Officer role. These moves underscore the shift to a new chapter under Abu Dhabi's direction, with the future strategy expected to prioritize circular economy initiatives and artificial intelligence applications.

A Bleak Operational Finale

Covestro's last full year as a listed entity was marred by significant challenges. Declining selling prices and adverse currency effects combined to reduce revenue by 8.7 percent to 12.9 billion euros. The impact on profitability was even more severe, with operating earnings (EBITDA) collapsing by over 30 percent to 740 million euros.

The bottom line showed a net loss of 644 million euros, a substantial deterioration from the previous year's deficit. Consequently, the company will not distribute a dividend to its shareholders. This operational weakness reflects the structural issues plaguing the wider chemical industry, which continues to grapple with overcapacity and subdued global demand.

The Squeeze-Out Mechanism Takes Center Stage

Despite the stark operational downturn, Covestro's share price remains remarkably stable at 60.72 euros, hovering near its 52-week high of 61.00 euros. This disconnect from business performance is entirely due to the takeover dynamics. XRG now controls more than 95 percent of the equity, satisfying the legal threshold to initiate a compulsory acquisition, or squeeze-out, of the remaining minority holders.

The delisting process is already underway. Since February 5, 2026, Covestro has been demoted from the strictly regulated Prime Standard to the General Standard, significantly reducing its ongoing reporting obligations.

All Eyes on the Shareholder Vote and Payout

For the minority investors who remain, the critical date is May 19, 2026. On that day, an extraordinary general meeting is slated to formally approve the squeeze-out resolution. Until then, operational developments are unlikely to influence the stock's valuation. Market attention is now singularly focused on the final cash compensation amount that majority shareholder XRG will determine for the outstanding shares.