• Offer price of ¢ã62.00 per share in cash, representing an attractive premium of 54 percent to the unaffected share price of Covestro 
• Board of Management and Supervisory Board recommend to Covestro¡¯s shareholders to accept the offer 
• ADNOC International is the right partner for consistent implementation of ¡®Sustainable Future¡¯ strategy 
• Basis for the partnership is the Investment Agreement signed on October 1, 2024 

07November2024£¬Today, the Board of Management and the Supervisory Board of Covestro AG (¡°Covestro¡±), have published their joint reasoned statement pursuant to Section 27 Wp¨¹G on the voluntary public takeover offer, which was issued on October 25, 2024 by ADNOC International Germany Holding AG, a subsidiary of ADNOC International Limited (together ¡°ADNOC International¡±). 

After thorough consideration, the Supervisory Board as well as the Board of Management of Covestro welcome and support the takeover offer by ADNOC International. Both bodies regard ADNOC International as a strong and long-term oriented partner, with whom Covestro will be able to further drive its successful ¡®Sustainable Future¡¯ strategy. It is the view of the Board of Management and the Supervisory Board that Covestro, with the strategic support of ADNOC International, will be able to build on an even stronger foundation for sustainable growth in highly attractive sectors and can therefore make an even greater contribution to the green transformation. 

¡°We have thoroughly reviewed the offer document published by ADNOC International in accordance with our obligations under stock corporation law¡±, says Dr Markus Steilemann, CEO of Covestro. ¡°Together with the Supervisory Board we have concluded that based on the broad commitments made by ADNOC International, a strategic partnership is the right step. We are also convinced that the partnership is in the best interest of Covestro, our shareholders, our employees and all other stakeholders of Covestro. We are pursuing a long-term growth strategy and will be able to execute on it even more consistently with the support of ADNOC International. We therefore support the offer and recommend our shareholders to accept it.¡± 


Key aspects of the offer document 

Covestro and ADNOC International have agreed on a long-term strategic partnership. The basis for this partnership is the Investment Agreement signed on October 1, 2024, which runs until the end of 2028. In the Investment Agreement, both companies have agreed on the main cornerstones of the partnership. In particular, the agreement contains several commitments on the part of ADNOC International to maintain Covestro's existing business activities, corporate governance and organizational business structure. 

The Investment Agreement expresses ADNOC International's utmost trust and confidence in Covestro's management team. On this basis, Covestro's Board of Management in its current composition will continue to be responsible for the operational management and strategic direction of the Company. 

Additionally, ADNOC International has assured Covestro in the offer document of its full support for the further execution of its ¡°Sustainable Future¡± strategy. To this end, ADNOC International shall subscribe to new Covestro shares issued in connection with an increase of the Company¡¯s share capital by 10 percent under simplified exclusion of subscription rights upon the completion of the transaction at the offer price, resulting in an amount of ¢ã1.17 billion proceeds at an offer price of ¢ã62.00. This will enable Covestro to consistently foster the further implementation of its growth strategy. 

In the Investment Agreement, ADNOC International also commits to recognizing the German governance regulations and to retaining the co-determined Supervisory Board. An important component is also the commitment that two members of the Supervisory Board on the shareholder representatives' side will remain independent of ADNOC Group after the takeover offer has been completed. The Investment Agreement also contains ADNOC International's explicit recognition of the existing general works agreements, collective bargaining agreements and the rights of the works councils in Germany. The same applies to speaker committee agreements and the rights of speaker committees. 

As part of the transaction, there are no plans to sell, close or significantly reduce Covestro's business activities and ADNOC International has undertaken in the Investment Agreement not to initiate any such actions. The Investment Agreement also contains a commitment to protect Covestro's technology and intellectual property. 

Furthermore, ADNOC International has also undertaken in the Investment Agreement that Covestro will continue to be managed as a stock corporation and that no domination and/or profit and loss transfer agreement will be concluded with Covestro. 

Evaluation of adequacy of the offer price 

The Board of Management and the Supervisory Board of Covestro, together with their respective advisors, have also thoroughly reviewed ADNOC International¡¯s offer with regard to the adequacy of the offer price of ¢ã62.00 per share. 

The offer price offered by ADNOC International implies an equity value for Covestro of approximately ¢ã11.7 billion and represents a premium of approximately 54 percent to the unaffected closing price on June 19, 2023 (the day prior to any media coverage of a potential transaction), as well as a premium of 61 percent on the unaffected, volume-weighted three-month average share price on Jun 19, 2023. 

In their assessment, the Board of Management and Supervisory Board, as further explained in the joint reasoned statement, have considered the results of a range of valuation approaches. 

In addition, the Board of Management and the Supervisory Board have given consideration to the results of the fairness opinions of the respective investment banks engaged by them. In these opinions, the respective banks have confirmed their assessment that the offer price is fair from a financial perspective. 

The offer made by ADNOC International therefore provides shareholders with an attractive opportunity to realize significant value already upon completion of the transaction. 

Against this background, the Board of Management and the Supervisory Board of Covestro consider the offer price to be adequate and jointly recommend to Covestro¡¯s shareholders to accept the offer. 

Acceptance period runs until November 27, 2024 

Following the approval by BaFin (Bundesanstalt f¨¹r Finanzdienstleistungsaufsicht), ADNOC International published the offer document on the website https://www.covestro-offer.com on October 25, 2024. The offer period will run from October 25, 2024, until 24:00 hrs (Frankfurt am Main local time) or 18:00 hrs (New York local time) on November 27, 2024. The potential additional offer period of two weeks is expected to commence on December 3, 2024, and will run until 24:00 hrs (Frankfurt am Main local time) or 18:00 hrs (New York local time) on December 16, 2024. 

The offer will be subject to a minimum acceptance level of 50 percent plus one share and customary closing conditions, including merger control, foreign investment control, EU foreign subsidies clearances. Currently, closing is not expected before the second half of 2025.