Can ADNOC’s €14.7B Deal Reinvent the Gulf’s Economy?

ADNOC’s Covestro buy signals a Gulf leap into sustainable materials

9 Oct 2025

Abu Dhabi’s national oil company, ADNOC, is pressing ahead with its €14.7bn purchase of Germany’s Covestro, a maker of high-end polymers. It is one of the biggest acquisitions ever attempted by a Middle Eastern energy firm and a symbol of how Gulf producers are trying to turn oil wealth into industrial muscle.

If completed, the takeover would propel ADNOC from a state-backed exporter of crude into a global force in advanced materials. Covestro’s products, used in wind turbines, electric vehicles and modern manufacturing, are vital to the green transition. “This is more than a business deal,” argues Karim Haddad, an energy analyst. “It’s a declaration that Gulf producers are moving into innovation and sustainability, not just feedstock supply.”

Both companies’ boards approved the plan late last year, and integration talks are under way. The deal has cleared antitrust scrutiny but still faces review by European regulators for potential state-aid and subsidy issues. ADNOC has offered remedies, and insiders expect completion in the second half of 2025.

The purchase fits a broader Gulf trend: investing oil profits in advanced industries to hedge against future declines in fossil-fuel demand. A foothold in Europe would give ADNOC access to Covestro’s R&D on sustainable polymers and position it within global supply chains for low-carbon materials.

Cultural differences may complicate the merger. Covestro’s German engineering ethos and ADNOC’s state-backed governance make for an unlikely pairing. Yet few doubt the strategic logic. For ADNOC, the move promises not just diversification but influence over a fast-growing sector central to decarbonisation.

If the deal closes, ADNOC will have done more than buy a company. It will have offered a glimpse of the Gulf’s industrial future, one in which oil money fuels chemistry rather than combustion.