Covestro unveils cost cuts amid UAE firm takeover talks
FRANKFURT: German chemical maker Covestro unveiled Tuesday a 400-million-euro ($430-million) cost-cutting plan, a day after announcing progress in talks about a mammoth takeover by Emirati national energy firm ADNOC.
The annual savings are to be achieved globally by the end of 2028, by cutting material and personnel costs, and 190 million euros of the total would be in Germany, the group said. But the Leverkusen-based company also said it had agreed with staff representatives not to make any compulsory redundancies at its German sites until the end of 2032.
“The last few years have been challenging for the chemical industry and for Covestro,” said CEO Markus Steilemann, adding that the cost-cutting program would help secure the group’s “leading position in the global market”.
Covestro has about 17,500 employees worldwide. The chemical industry in Europe’s biggest economy has been in crisis in recent years, with the energy-intensive sector hit hard by surging costs after Russia’s invasion of Ukraine. On Monday, Covestro announced it had entered “concrete negotiations” with ADNOC after receiving a takeover offer worth nearly 12 billion euros.
It was a step forward in long-running talks between the two sides, and sent the German company’s shares surging. The UAE firm is headed by Sultan Al Jaber, who was president of last year’s COP28 climate talks in Dubai. Covestro - a former division of chemical giant Bayer - has expertise in areas such as chemical recycling that are key for the future of the industry, and which ADNOC is interested in. – AFP