The European Union’s competition regulator said Friday it conditionally cleared Abu Dhabi’s state oil company ADNOC for its €11.7 billion (~$13.6 billion) bid for German chemical company Covestro (OTCPK:CVVTF) (OTCPK:COVTY).
The European Commission said ADNOC’s offer to maintain Covestro’s (OTCPK:CVVTF) (OTCPK:COVTY) intellectual property in Europe as well as concessions on the company’s unlimited state guarantee from the U.A.E. settled its earlier concerns that its state subsidies could stifle competition.
The deal, one of the largest foreign takeovers of an E.U. company by a Persian Gulf state, has prompted concerns that ADNOC may be using state subsidies to acquire Covestro (OTCPK:CVVTF) (OTCPK:COVTY); an in-depth investigation began earlier this year under relatively new legislation designed to tackle what European officials see as distorting subsidies from foreign governments.
