Over $100 billion! Oil giant acquires chemical industry titan

As early as last June, ADNOC extended an initial acquisition offer to Covestro, with a preliminary bid of over €50 per share. At the time, Covestro rejected the proposal, citing the offer as too low. Thereafter, ADNOC steadily raised its bid—until it proposed a potential offer price of €62 per share. Only then did Covestro relent and agree to enter concrete negotiations regarding the potential transaction and a possible investment agreement. Once the price was settled, the acquisition proceeded smoothly, culminating in a final deal valued at €11.7 billion. That figure does not include an additional €3 billion in debt assumed by ADNOC, nor the €1.17 billion Covestro will receive post-transaction to further advance its growth strategy. Moreover, ADNOC made a series of commitments: Covestro will continue operating as a stock corporation; no control or profit-and-loss transfer agreements will be signed between the two parties; and there are no plans—integral to the transaction—to sell, shut down, or significantly scale back Covestro’s business operations. ADNOC’s acquisition of Covestro represents the largest merger-and-acquisition deal in the oil giant’s history since its founding in 1971. So just how valuable is Covestro—this ‘plump fish’—that ADNOC was willing to invest such enormous resources and make such significant concessions to win it over? 02 Why the Determination to Acquire It ADNOC does not aspire merely to remain an oil giant—it aims to become one of the world’s top five chemical companies. Rather than focusing solely on whether Covestro is a profitable ‘cash machine,’ ADNOC places greater emphasis on its long-term strategic value and its assets capable of unlocking new growth opportunities. Covestro’s expertise in high-performance materials and specialty chemicals—and its adoption of advanced technologies including artificial intelligence—is highly attractive to ADNOC. Tracing its origins, Covestro was formerly the Material Science division of Germany’s Bayer Group. Eight years ago, it was spun off and listed independently. Its core products—including polyurethanes, polycarbonates, coatings, adhesives, and specialty chemicals—are widely applied across multiple industries. Crucially, many of these products rely on proprietary, near-monopoly technologies. Covestro ranks among the world’s top three producers of MDI, TDI, and polyether, and maintains robust R&D platforms for advanced chemical materials and downstream applications—enabling ADNOC to shift strategically from upstream raw materials to downstream applications. Furthermore, Covestro boasts a sound balance sheet and strong liquidity, and is increasingly integrating its financial strategy with sustainability goals to drive sustainable growth—a vision fully aligned with ADNOC’s own ‘smart growth’ and future-oriented strategy. For Covestro, this acquisition secures a stable, reliable source of support. Indeed, looking at its financial reports over the past two years, Covestro’s performance has been, frankly, difficult to witness: its net profit has posted losses for two consecutive years. After all, geopolitical tensions have run high, the global economy has languished, and energy prices have soared—making these two years among the most challenging in decades for the chemical industry, especially for German chemical firms burdened by exorbitant energy costs. Caught in this maelstrom, Covestro has suffered greatly. In June this year, it launched a global transformation initiative named STRONG, which includes a target to save €400 million annually in material and labor costs worldwide by 2028—clearly a measure taken to cope with its current operational difficulties.

Data and the Capital Cycle: How Koch Built an Empire

In the mid-1970s, while engineer Bernard Paulsen was deeply immersed in analyzing and optimizing the Pine Bend refinery, Charles Koch hired a man named F. Lynn Markel. Markel was a finance professional working at a small Wichita-based company that operated a chain of television stations. After a series of intense interviews, Koch appointed him Assistant Treasurer of Koch Industries’ petroleum division. A year later, Markel was promoted to Treasurer of the entire company. It was in this role that Markel helped Koch transform its financial management practices. In those early years, Markel’s biggest challenge was company-wide budgeting. The mid-1970s was an era of extreme price volatility. To put it mildly, when Markel joined Koch, oil prices were wildly unstable. His challenge was compounded by the nationwide ripple effects of the oil shocks, which sent interest rates and inflation soaring. Shortly after the Arab oil embargo, President Richard Nixon implemented rationing measures—even urging Americans to lower their thermostats by about six degrees Celsius. All this volatility made Markel’s job extraordinarily difficult. As Leonard wrote: “One of the thorniest problems Markel dealt with was budgeting. It was standard practice for each department to prepare annual (and sometimes quarterly) budgets, against which their performance would then be measured. This was routine in American corporate life—but the external world refused to cooperate with standard operating procedures. For the first time in history, oil prices could halve within months—or unexpectedly double over the same period. ‘Typically, by the end of the first quarter, the budget for the remainder of the year had already become nearly meaningless,’ Markel recalled. Yet despite this reality, Koch managers still spent countless hours in July through December preparing spreadsheets and drafting budgets—and they expected their performance to be evaluated against those very numbers. Many of these employees, like Markel himself, came from publicly traded companies, where quarterly budgets were treated as sacred documents. Public companies must report profits to Wall Street every three months; a poor report could trigger a sharp drop in stock price. Budgeting thus served as a tool to forecast quarterly results and communicate those expectations to investors. Consequently, everything inside the company began revolving around the budget: managers calculated how much they would spend and how much they would earn—and published those figures. Then they spent the entire year striving to hit those targets. Because Koch Industries was not a public company, it bore no obligation to disclose profit forecasts to anyone. Markel attended numerous meetings held in the cluster of small offices surrounding Charles Koch’s second-floor office—the nerve center of executive decision-making. There, Markel and others wrestled with how to produce more accurate budget figures amid monthly market turbulence. Among those present at these meetings was a young man named Paul Brooks, a former Exxon employee who possessed an engineer’s grasp of complex problems. But Brooks also had a creative streak—one that had gone underutilized in Exxon’s rigid corporate culture—and he quickly became Charles Koch’s close confidant. During one budget-related meeting, Brooks offered a disarmingly simple suggestion that surprised Markel: ‘Why not just abolish them?’

Koppers Holdings Inc. Q2 Earnings and Revenues Top Estimates on Performance Chemicals Segment Strength

Aug 11, 2026

Koppers Holdings Inc. exceeded Q2 2026 revenue and adjusted earnings estimates driven by its Performance Chemicals segment, despite a reported net loss due to impairment charges.

TradingView

2026-08-07

Koppers Holdings Delivers 21.2% Q2 2026 Earnings Beat, Revenue Up 3%

2026-08-11

Koppers Holdings Inc. Q2 Earnings and Revenues Top Estimates on Performance Chemicals Segment Strength

Koppers Holdings Inc. Q2 Earnings and Revenues Top Estimates on Performance Chemicals Segment Strength

FAQ