By Foo Yun Chee
BRUSSELS (Reuters) -ADNOC has submitted robust remedies that should win EU approval for its 14.7-billion-euro ($17 billion) bid for Germany’s Covestro, the international investment arm of the Abu Dhabi state oil giant, said on Monday.
The European Commission is now examining the deal, ADNOC’s biggest ever acquisition and one of the largest foreign takeovers of an EU company by a Gulf state, on concerns that ADNOC may be using state subsidies to acquire the chemicals company.
At issue is a state unlimited guarantee and the possibility of foreign aid involved in the capital increase at Covestro.
“We have submitted a robust and proportionate package of proposed commitments,” a spokesperson for ADNOC’s XRG said in a statement without providing details of the remedies.
“They represent our disciplined approach as a long-term investor and underscore the strength of this transaction, and we are confident this will lead to timely clearance.”
ADNOC has offered two remedies which are proposed changes to its articles of association to remove EU concerns about the state unlimited guarantee and a pledge to retain Covestro’s intellectual property in Europe, people with direct knowledge of the matter said, confirming a Reuters story on September 10.
The Commission has no more issues with its 1.2 billion euro capital increase for Covestro, they said.
In a separate development, the EU watchdog paused its investigation into the deal on September 3, a day after remedies were submitted.
“The Commission can stop the clock if it doesn’t receive, in a timely fashion, a material piece of information requested from the parties,” a spokesperson for the EU executive said in an emailed statement.
“Once the missing information is supplied by the parties, the clock is re-started and the legal deadline for the Commission’s decision is then adjusted accordingly.”
($1 = 0.8565 euros)
(Reporting by Foo Yun Chee; Editing by Louise Heavens)
