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ARTICLE · 03 DECEMBER 2025

European Commission Approves ADNOC-Covestro Merger Under FSR Rules

Addleshaw Goddard
Addleshaw Goddard
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The European Commission has conditionally cleared ADNOC's €14.7 billion acquisition of Covestro under the Foreign Subsidies Regulation (FSR), marking only the second Phase II clearance since the FSR took effect.

European UnionAntitrust/Competition Law

The European Commission has conditionally cleared ADNOC's €14.7 billion acquisition of Covestro under the Foreign Subsidies Regulation (FSR), marking only the second Phase II clearance since the FSR took effect. The Commission identified foreign subsidies—such as an unlimited UAE State guarantee and a capital increase—that risked distorting competition. To address this, ADNOC committed to remove the guarantee and provide EU companies access to Covestro's sustainability-related IP for ten years.

ADNOC/Covestro: Phase II FSR Review and Innovative Commitments

The notification obligations under the Foreign Subsidies Regulation (the "FSR") came into effect in October 2023. Since then, the European Commission (the "Commission") had only once cleared an M&A transaction subject to commitments - the FS.10001 Emirates Telecommunications Group Company PJSC/PPF Telecom ("e&/PPF") case - until 14 November 2025, when it conditionally cleared the acquisition of Covestro

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