Covestro's Final Chapter as a Public Company Nears

XRG initiates mandatory squeeze-out of Covestro minority shareholders after crossing 95% ownership. The 2026 AGM will finalize delisting as the company posts a €644M net loss and leadership changes loom.

The formal process to remove minority shareholders from Covestro AG is now underway. XRG, the majority shareholder, has crossed the critical 95% ownership threshold, triggering a mandatory squeeze-out procedure for the remaining investors in the Leverkusen-based plastics manufacturer. The upcoming Annual General Meeting on May 19, 2026, is expected to finalize the arrangements for the company's delisting.

Operational Challenges Amid Transition

Covestro's 2025 financial results highlight significant headwinds. Group revenue declined by 8.7% to €12.9 billion. EBITDA saw a more severe contraction, falling by nearly 31% to €740 million. The company reported a negative free operating cash flow of €283 million and posted a net loss of €644 million for the period.

Management attributed these results to a combination of lower selling prices, adverse currency effects, and structural overcapacity coupled with persistently low plant utilization. For the fourth consecutive year, the company will not pay a dividend. The last distribution to shareholders was in 2021, amounting to €3.40 per share.

Amid these challenges, the STRONG cost-saving initiative continues. The program has realized approximately €275 million in savings through the end of 2025, with an annual target of €400 million by 2028. In a strategic expansion, Covestro is also set to acquire two production sites for HDI derivatives from Vencorex, located in Thailand and Texas. This transaction is scheduled for completion in the first half of 2026.

Leadership in Flux

The executive suite is poised for a major reshuffle. Chief Executive Officer Markus Steilemann has announced he will not seek an extension of his contract, which runs until May 2028. Separately, Chief Financial Officer Christian Baier will depart the company in September. The Supervisory Board now faces the task of appointing successors for both key positions.

The Squeeze-Out Mechanism is Activated

With a holding of 95.1% of Covestro's shares, XRG has formally initiated the compulsory acquisition of the remaining stock. Both the Management Board and the Supervisory Board have endorsed this move. Following approval at the 2026 Annual General Meeting and subsequent entry in the commercial register, all outstanding shares will automatically transfer to XRG.

The withdrawal from public capital markets is already in progress. Since early February, Covestro's shares have been downgraded from the Prime Standard to the General Standard segment of the Frankfurt Stock Exchange, reducing its disclosure obligations. The company's admission to the regulated market will terminate entirely after May 5.

Shareholder Focus Shifts to Cash Compensation

For the minority shareholders who remain, attention is now fixed on a single outcome: the level of the cash settlement. An independent auditor will determine the fair enterprise value, which will form the basis for the compensation payment. Until the shareholder meeting, Covestro's share price is likely to trade within a narrow range around this anticipated settlement figure, with operational performance no longer influencing valuation.

The squeeze-out and subsequent delisting will mark the end of the stock market journey for the former Bayer subsidiary. Its approximately 17,600 employees across 46 global sites will then operate under the ownership of the Abu Dhabi state oil company. XRG was established in November 2024 as an international investment vehicle for low-carbon energy and chemicals, boasting an enterprise value exceeding $150 billion. The acquisition of Covestro represents the largest takeover to date for ADNOC, XRG's parent company.