Covestro (1COV) Investor Update summary

Strategic partnership and transaction overview

• Signed investment agreement with ADNOC, including a voluntary public takeover offer at €62 per share, representing a 54% premium to the unaffected share price as of June 2023 and valuing the company at approximately €11.7 billion.

• ADNOC will subscribe to a 10% capital increase at the offer price, providing €1.17 billion in proceeds to support strategic initiatives and Covestro's "Sustainable Future" strategy.

• No sale, closure, or significant reduction of business activities is planned; operational management and strategic direction remain unchanged.

• ADNOC supports the current business structure, strategy, and vision for full circularity, with commitments to sustainability and growth.

• The investment agreement runs until the end of 2028, with no domination or profit and loss transfer agreement during this period.

Governance, employee, and legal assurances

• Governance structure, including the co-determined supervisory board and headquarters in Leverkusen, will be maintained; ADNOC will receive 4 out of 12 Supervisory Board seats, and two independent members will remain.

• Employee interests are protected, with recognition of existing works agreements, collective bargaining, and works council rights in Germany.

• Intellectual property and technology will remain protected, with no transfer to ADNOC or third parties.

• The company will remain managed as a German stock corporation, with the current management team continuing to lead.

• Disputes under the agreement will be resolved through arbitration.

Offer process, regulatory, and timeline details

• Offer subject to a minimum acceptance rate of 50% plus one share and customary closing conditions, including merger control, foreign investment, and EU foreign subsidies clearance.

• Main regulatory approvals required in the EU, US, and China.

• Initial acceptance period expected to last four to five weeks after offer document publication; closing anticipated in H2 2025.

• After the acceptance period, a two-week additional acceptance window will be available for remaining shareholders.

• Both Boards of Management and Supervisory Board support the agreement and intend to recommend acceptance to shareholders.