Selling out the German economy? | tagesschau.de

The oil giant Adnoc wants to buy the Leverkusen company Covestro for up to 16 billion euros. Recently, several German companies have been the target of takeovers. What do experts say about this?

There had been speculation for a long time and negotiations for a long time. Now it’s official: With the oil company Adnoc, an Arab state-owned company wants to take over a DAX company, the plastics specialist Covestro, for the first time. A sensation, one might think, but in the business world the deal is given a veneer of normality.

“I see it completely neutrally at first – also because it is probably a friendly takeover,” says Thomas Fräbel, head of capital markets law at the Munich law firm Rödl und Partner. Although it is about an Arab investor, preliminary discussions have apparently been held and no ideas have come around the corner without consulting with management. For example, Covestro’s independence should be secured.

Many major foreign investors have already established themselves in the DAX

Consensus and precise agreements are the focus of the deal, which still has to be approved by the federal government and the shareholders. Strong price gains followed in response to the purchase offer. The stock market doesn’t want to know anything about a supposed sell-off in the German economy.

“The sell-off in the German economy is not being done with Covestro, but with other stocks,” emphasizes Jürgen Molnar, capital market strategist at RoboMarkets. “Then they’re out and someone else comes into the DAX – the matter is settled.”

What the expert is referring to: More than half of the DAX shares are already in foreign hands. And in some companies, foreign investors have firmly established themselves as so-called anchor shareholders – above all the Emirate of Qatar, which holds, among other things, 17 percent of VW, eight percent of Deutsche Bank and more than three percent of the technology group Siemens. Major shareholders can exercise control over the companies and have a say in the business through seats on the supervisory board.

German corporations as a bargain

And yet: There have been a number of major takeovers recently. The Danish competition is buying the railway’s own logistics group Schenker, while the Chinese are taking over the automotive supplier Leoni and with it sensitive technology. The major Italian bank UniCredit is reaching out to Commerzbank, and Adnoc is creating a reality with the Covestro takeover.

This has something of a sell-off in the German economy, says Carsten Brzeski, chief economist at the major Dutch bank ING. “What becomes clear is that there are still companies that are attractive enough for foreign investors. At the same time, we in Germany have to be careful that a sell-off is not imminent.” Other countries are taking a more protectionist approach when it comes to the country’s entrepreneurial crown jewels.

And that seems to be increasingly the case, for which observers also blame the tense situation in the German economy. German companies are a bargain in international comparison. They are technology leaders in many areas. Brzeski misses a clear political edge: “So we have to assess individual cases every time. But there is still a large piece of a holistic industrial strategy missing.”

“Strategy negotiated one-to-one”

Yesterday it became known that the state oil company Adnoc from the United Arab Emirates wants to take over the German plastics company Covestro. The Arabs are offering 62 euros per share and value the shares of the DAX group at 11.7 billion euros, as the companies announced. The Abu Dhabi company also wants to buy new shares worth almost 1.2 billion euros from the Leverkusen company through a capital increase. Together with Covestro’s debts of around three billion euros, Adnoc wants to invest almost 16 billion euros.

The takeover had been expected for a long time. Now, after a long campaign, the oil giant has achieved its goal. Around ten years after the IPO in 2015, the former Bayer subsidiary could get a new owner. Covestro boss Markus Steilemann does not expect the deal to be completed until the second half of 2025, as he said in an interview with the Reuters news agency. “I believe that it is exactly the right step to not only keep Covestro on a growth path, but also to put it on the fast track.” At the same time, “our company’s culture and values, which were non-negotiable for us,” remained intact. “We have renegotiated our strategy one-to-one.”