Covestro says ADNOC deal closer as ‘talks continue in a constructive manner’

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Covestro expects to give an update on a possible deal with suitor Abu Dhabi National Oil Company (ADNOC) relatively soon, the German chemicals maker said on Tuesday after lowering the upper end of its profit guidance.

“Talks with ADNOC continue in a very constructive manner, we expect to be able to give an update relatively soon,” finance chief Christian Baier told Reuters in an interview.

Covestro said in June it was stepping up talks with ADNOC after the UAE energy company made an improved EUR11.7bn($12.7bn) takeover bid following more than a year of pursuing the chemicals firm.

Outlook

The German group forecast 2024 earnings before interest, tax, depreciation and amortisation (EBITDA) of between EUR1bn and EUR1.4bn($1.1bn and $1.5bn), bringing down the top end from EUR1.6bn, citing the challenging economic environment.

The company, whose main products include foam chemicals used in mattresses, car seats and insulation for buildings, said lower raw material prices had only partially offset the demand-related decline in average sales prices.

Covestro‘s EBITDA fell 16.9 per cent to EUR320m in the April-June quarter, beating analysts’ average estimate of EUR311m in a company-provided consensus.

Its second-quarter sales of EUR3.69bn were 0.8 per cent lower than last year and in line with the consensus.

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