EU Pauses Probe Into ADNOC's €14.7 Bn Covestro Bid

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EU antitrust authorities have pressed pause on the investigation into Abu Dhabi National Oil Company's €14.7 billion takeover of Germany's Covestro, granting the European Commission extra time to collect detailed information on the transaction. Authorities have set a decision deadline of 2 December 2025.

The deal, agreed last October, stands as ADNOC's largest-ever acquisition and one of the most significant foreign takeovers within the European Union by a Gulf entity. Covestro, a leading German chemicals firm, is known for its production of materials used in car seats, building insulation and mattresses.

This latest development follows the Commission's initiation of a formal inquiry in July under the EU's Foreign Subsidies Regulation. The investigation centres on concerns over whether the deal benefited from financial advantages such as an unlimited state guarantee and a pledged capital increase by ADNOC-arrangements that may have allowed it to outbid unsubsidised competitors and potentially distort competition across the EU market.

In parallel, ADNOC has expressed criticism of some of the Commission's information requests, deeming portions irrelevant to the substance of the transaction. The parties reportedly engaged in constructive discussions this week to address outstanding issues and possible remedies.

Back in May, EU competition authorities had granted unconditional approval for the takeover, concluding it posed no direct threat to market competition within the sectors in which ADNOC and Covestro operate. That decision pertained solely to antitrust concerns and did not address broader subsidy-related implications.

The probe now requires the EU to determine whether the UAE-backed aspects of the deal unfairly influenced the transaction or might harm market dynamics post-acquisition. This reflects a growing regulatory focus on curbing potential distortions arising from state-supported acquisitions by non‐EU entities.

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Covestro has not commented on the pause. The Commission, typically reticent until investigations conclude, has also declined to comment on the procedural step of pausing the probe.

As the Commission proceeds with evidence gathering and dialogue with ADNOC, the temporary break in investigative activity underscores the complexity of balancing regulatory rigour with fair treatment of cross-border investments-especially when state-owned entities and potential financial support are involved.

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