Covestro, a chemicals company, has announced that its board has decided to enter “open-ended” talks with Abu Dhabi National Oil Company (ADNOC).

The company added that the potential conditions of a deal would depend on the talks that will follow. The discussions will also focus on ensuring the implementation of Covestro’s sustainability strategy.

ADNOC made a €10bn ($10.73bn) offer to buy Leverkusen, Germany-based Covestro in June.

However, Covestro rejected the offer saying that the €55-per-share offer was too low.

Covestro’s latest announcement comes after United Arab Emirates Government-backed ADNOC increased the offer price.

ADNOC’s most recent offer for the German company was €60 per share, reported the Financial Times, citing sources.

Excluding debt and other considerations, the most recent offer values Covestro at around €11.6bn, the report said.

Covestro is engaged in manufacturing foam chemicals that are used in mattresses, car seats and construction insulation.

Covestro CEO Markus Steilemann said: “The interest of ADNOC in our company underlines our strong position as one of the world’s leading manufacturers of high-quality polymer materials and as a leader in the shift towards a circular economy.

“Beyond current headwinds in our industry, we are optimally positioned to unlock significant long-term value in highly attractive industries underpinned by strong secular growth trends.”

For the oil and gas giant, the acquisition forms part of efforts to diversify and expand operations.

Last month, it was reported that ADNOC is pursuing acquisitions worth $50bn.

Alongside Covestro, ADNOC is holding talks with Brazilian petrochemical manufacturer Braskem and Austria’s OMV.