Covestro's Final Chapter: Merger Completes Corporate Transformation

ADNOC's acquisition of Covestro concludes, creating Borouge International as a top polyolefins producer. Covestro faces market headwinds despite cost savings.

The long-anticipated acquisition of Covestro by Abu Dhabi National Oil Company (ADNOC) is reaching its conclusion, marking the impending delisting of the Leverkusen-based chemical giant from the stock exchange. A significant milestone was passed on March 31, 2026, with the official establishment of Borouge Group International AG. This entity consolidates ADNOC's global chemical holdings, with Covestro slated to operate as its specialty chemicals platform within the new structure.

Market Challenges Persist Amid Structural Shift

Despite the evolving corporate landscape, Covestro continues to face operational headwinds. A difficult market environment characterized by overcapacity and persistent price pressure is weighing on profitability. For the 2026 fiscal year, management anticipates EBITDA to remain roughly stable at approximately €740 million, following a substantial consolidated net loss of €644 million in 2025.

In response, the company's "STRONG" cost-saving initiative is being implemented. By the end of 2025, savings of €275 million had already been realized, with the program targeting an annualized effect of €400 million by 2028. Furthermore, Covestro is progressing with plans to acquire two HDI derivatives production sites from Vencorex in Thailand and Texas, aiming for completion in the first half of 2026.

The Birth of a Global Industry Leader

The formation of Borouge International creates a new powerhouse in the chemicals sector. It results from the merger of Borouge Plc, Borealis, and NOVA Chemicals, positioning the combined entity as the world's fourth-largest producer of polyolefins. Ownership is split evenly, with 50% held by OMV and 50% by XRG, ADNOC's international investment arm. The consolidated group has received solid financial health ratings from the three major agencies: S&P, Moody's, and Fitch.

An initial public offering for the new group is not currently on the agenda. Plans for a listing on the Abu Dhabi Securities Exchange, alongside an exchange offer for existing Borouge Plc shareholders, have been postponed until 2027. This move remains contingent upon favorable market conditions and regulatory approval from the UAE Capital Market Authority.

Equity Markets Anticipate the Inevitable

These developments have little remaining impact on Covestro's share price, as the market has largely priced in the company's exit. The stock currently trades around €59.50, hovering just above the formal compensation price of €59.46 set for minority shareholders. Trading volatility is minimal, with a 30-day volatility reading below 3.5%.

XRG, together with its German subsidiary, already controls 95.1% of Covestro's share capital. The final decision regarding a squeeze-out of remaining minority holders is scheduled for the Annual General Meeting on May 19, 2026. Prior to that, the stock's admission to the regulated market will terminate on May 5. Subsequent registration in the commercial register will trigger the automatic transfer of all outstanding shares to the majority owner, formally concluding Covestro's history as a publicly traded company.