By: ICN Bureau
Last updated : November 23, 2025 7:10 pm
The partnership will see the two companies push aggressively into innovation, circular production, and digital transformation
German chemicals powerhouse Covestro AG and Abu Dhabi's XRG have secured the final regulatory green light for their strategic partnership, winning approval from Germany’s Federal Ministry for Economic Affairs and Energy. The decision clears the last remaining hurdle under foreign investment rules, setting the stage for the deal to close within days.
The partnership—positioned as a transformative move for the global chemicals sector—will see the two companies push aggressively into innovation, circular production, and digital transformation.
“This is an exciting new chapter for Covestro,” CEO Markus Steilemann said. “With XRG as a strong, long-term partner, we will drive innovation, scale circular solutions, and set new standards for the industry. Together, we can take our ‘Sustainable Future’ strategy to the next level.” Steilemann said the alliance promises benefits across Covestro’s entire ecosystem, from customers and suppliers to employees and shareholders.
XRG echoed the momentum. “Securing these regulatory clearances allows us to move forward and focus on establishing a long-term, stable partnership,” said Rainer Seele, President of Global Chemicals at XRG. He called the acquisition a major step in expanding XRG’s footprint in chemicals and advancing its goal of becoming one of the world’s top three investors in the sector. “We have deep respect for Covestro’s people and expertise, and we look forward to realizing the company’s full potential.”
The collaboration aims to tap into global megatrends reshaping industries and societies—from sustainability and advanced technologies to energy transition. A planned €1.17 billion capital increase upon closing will fuel Covestro’s ongoing transformation and accelerate its investment roadmap.
With XRG as a long-term shareholder, Covestro says it will intensify its push into circular materials, expand digital capabilities—including AI and quantum technologies—and strengthen its presence in high-growth markets such as mobility, construction, and electronics. XRG’s energy-transition expertise, the companies said, will help bolster Covestro’s access to cleaner energy and enhance resilience amid global volatility.
Under the terms of the Investment Agreement, Covestro will remain operationally autonomous. Its current Board of Management, led by Steilemann, will continue to steer strategy and daily operations. Covestro’s corporate structure, German governance standards, works agreements, and Leverkusen headquarters will remain intact.
As the companies prepare to close the deal, both sides are framing the partnership as a platform for long-term value creation—and a reshaping of the chemicals landscape.
XRG is an investment company created by the Abu Dhabi National Oil Company (ADNOC).