ADNOC dealmaking goes straight to top amid Covestro negotiations

A $150 billion five-year capital spending plan approved by MBZ has provided the support for dealmaking efforts

UAE President Mohamed bin Zayed delivers a speech during the opening of the High Level Summit of the 2022 United Nations Climate Change Conference COP27 in Cairo. (Getty Images)

The decision by the UAE’s national oil company ADNOC to move from operating simply as a domestic oil producer to taking the reins as an international dealmaker comes straight from the top – and progress this week on a $12.5 billion takeover of German chemicals giant Covestro may burnish its reputation.  

UAE President Sheikh Mohamed bin Zayed chaired a 2022 board meeting where he approved a $150 billion five-year capital spending plan to transition the company from a traditional state oil firm into a diversified, multinational energy company. 

When the Covestro deal appeared to stall in recent months, ADNOC raised its bid after seeking approval from MBZ, Bloomberg reports. The negotiations took place against a backdrop of accelerating deal activity at ADNOC and its alternative energy company, Masdar, in which it owns a 33% stake. 

Now Masdar finds itself in a bidding war to acquire Spanish renewables firm Saeta Yield from Brookfield. In the past year it has bought a renewable energy company in Greece and announced a deal to purchase a 50% stake in Terra-Gen, one of the largest private renewable energy producers in the U.S.

The ink dries on these agreements as ADNOC is boosting production capacity and Masdar is looking to develop or acquire an energy portfolio of at least 100 GW capacity by 2030.