June 20 (Reuters) – Abu Dhabi National Oil Company (ADNOC) has approached Covestro AG (1COV.DE)The German plastics and chemicals maker, with a market capitalization of 7.8 billion euros ($8.5 billion), has made an offer, people familiar with the matter said on Tuesday.
Details of the proposed terms and how Covestro would respond were not yet known. The sources requested anonymity because the matter is confidential.
ADNOC did not immediately respond to a request for comment, while Covestro declined to comment.
Covestro, a maker of clear polycarbonate plastic and chemicals for insulation and upholstery foams, issued profit guidance in April, reassuring the market about its growth prospects. It also reinstated its share repurchase program.
Earlier Tuesday, it confirmed its outlook for 2023.
Covestro shares were up 11 percent at 1245 GMT to their highest level in more than a year.
The merger would give energy giant ADNOC, also a maker of refined products and petrochemicals, access to more advanced materials for electric vehicles, building insulation, and coatings, adhesives and engineering plastics.
The group launched a transformation strategy four years ago as part of Abu Dhabi’s plan to diversify its economy and attract foreign investment.
ADNOC began floating units in late 2017. Over the past two years, it has listed businesses separately, giving investors exposure to its petrochemicals, fertilizers, drilling services, natural gas and logistics businesses.
ADNOC CEO Sultan al-Jaber is leading the company’s forays into new energy, low-carbon fuels such as ammonia and hydrogen, as well as liquefied natural gas and chemicals.
Reporting by Christoph Steitz, Ludwig Burger and Patricia Weiss in Frankfurt, additional reporting by Hadeel Al Sayegh in Dubai; Editing by Greg Roumeliotis, Louise Heavens and Sharon Singleton
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