Covestro's Final Chapter: Delisting Marks a Corporate Transition

Covestro to delist as majority owner XRG forces squeeze-out. The firm posted a €644M net loss in 2025, with no dividend. Share price is now driven by the expected cash compensation.

In a matter of weeks, Covestro's longstanding presence on the stock exchange will conclude. The polymer manufacturer's equity is set to vanish from public trading, a move driven by its majority shareholder, XRG, which now controls over 95% of the company. For the remaining minority investors, the central issue is the forthcoming cash compensation payment.

Operational Performance in 2025: A Challenging Year

The company's 2025 financial results presented a stark picture. Revenue contracted by 8.7% to €12.9 billion. The decline in profitability was even more pronounced, with EBITDA plunging nearly 31% to €740 million. Free Operating Cash Flow deteriorated significantly, falling to a negative €283 million.

This culminated in a net loss of €644 million for the year. The Performance Materials segment, responsible for approximately half of group sales, saw its revenue drop from €7.0 billion to €6.1 billion. Unsurprisingly, no dividend will be distributed; the last payout to shareholders occurred back in 2022.

The Squeeze-Out Path: Key Date in May 2026

XRG's current 95.1% stake in the Leverkusen-based firm sets the stage for the final act. A shareholder meeting scheduled for May 19, 2026, is expected to ratify the squeeze-out resolution, formally excluding minority holders. Both the management and supervisory boards endorse this step, aimed at simplifying the ownership structure and reducing capital market compliance obligations.

The march toward delisting is already well underway. Since early February, Covestro shares have been downgraded to the General Standard from the Prime Standard segment, relieving it of stricter transparency rules. Following May 5, this listing will be downgraded further, accelerating the full withdrawal from public markets.

Sector Headwinds and Internal Measures

Management does not anticipate a meaningful recovery in 2026. The broader chemical industry continues to face pressure from global overcapacity, intense price competition, and protectionist trade policies. Covestro guides for EBITDA to remain at levels similar to the previous year, though it projects a substantial improvement in Free Operating Cash Flow.

A source of optimism is the ongoing STRONG efficiency program. By the end of 2025, the group had already realized savings of approximately €275 million. The target is to achieve annual cost reductions of €400 million by 2028. Concurrently, Covestro plans to acquire two production sites for HDI derivatives from Vencorex, located in Thailand and Texas, with the transaction expected to close in the first half of 2026.

Share Price Diverges from Business Fundamentals

Despite the weak operational performance, Covestro's share price has remained stable, trading near its 52-week high of €61.00. This decoupling from business fundamentals has a straightforward explanation: the stock is no longer valued based on financial results but solely on the anticipated cash settlement from the impending squeeze-out.

Once the resolution is passed and entered into the commercial register, all remaining shares will automatically transfer to XRG, and the stock exchange listing will terminate permanently. For Covestro's roughly 17,600 employees across 46 global production sites, this will open a new chapter under the ownership of the state-owned oil company from Abu Dhabi.