ADNOC is working to expand and diversify its operations in both downstream and renewable energy sectors. Credit: kingma photos/Shutterstock.

Two of the top 15 investors of German chemicals company Covestro are urging it to commence formal acquisition discussions with Abu Dhabi National Oil Company (ADNOC), reported Reuters.

In June, ADNOC made a €10bn ($10.78bn) offer to buy Leverkusen-based Covestro, which rejected the offer citing it was too low.

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At the time, the government-backed ADNOC offered a price of €55 per share for Covestro.

As per the report, ADNOC informally notified Covestro earlier this month that, subject to the German company starting formal negotiations, it may increase its informal offer to €60 per share.

Covestro, which manufactures foam chemicals used in mattresses, car seats and construction insulation, is yet to officially comment on the takeover bid.

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According to Union Investment fund manager Arne Rautenberg, management should take the next step and start official discussions.

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This will help prevent additional speculation and market uncertainty.

With the higher offer, Covestro would be valued at approximately €11.6bn ($12.58bn).

The second investor, who requested anonymity, expressed concern that the continued uncertainty could affect Covestro’s shares due to acquisition rumours that have been circulating since June 2023.

Covestro declined to comment on the development, reported the news agency.

Rautenberg and the other stakeholders noted that in addition to price, the parties will need to agree on location and employment.

The unnamed investor also noted that there appeared to be a desire to maintain the companies’ separation and Covestro’s independence.

The news comes as ADNOC works to expand and diversify its operations in downstream industries and in the renewable energy sector.

Earlier this month, it was reported that ADNOC created an investment team, with a focus on spending $50bn on acquisitions.