1COV

XRG's Takeover of Covestro

The long-stop date for XRG’s takeover of Covestro is top of mind at the European Commission as the regulator reviews the buyer’s proposed remedies, CTFN understands.

XRG, a subsidiary of Adnoc, submitted a package of remedies to the EC for its review of the transaction under the EU Foreign Subsidies Regulation (FSR) yesterday, October 2, exactly two months before the December 2 long-stop date.

Not only is everyone involved at the EC, from the case team to the final decision makers, well aware of the significance of this deadline, it is understood they are feeling pressure from Adnoc’s recent criticism of the process.

Adnoc last month issued a public broadside against the EC’s decision to stop the clock, and the buyer’s subsequent meetings with the regulator have added a sense of further urgency to the process.

For all this urgency, the few available FSR precedents suggest the process could run up against the deadline. In e&/PPF Telecom, it took two months for the EC to clear the deal after remedies were submitted. 

But a few differences suggest that the e&/PPF case sets an upper limit on the timeline going forward. That case required the regulator to reach out to lots of third parties, including the UAE telecoms authority and local banks. Such efforts may be less relevant for Covestro/XRG. It also did not help that e& submitted remedies in July, just before the August holidays in Brussels.

The next steps in the FSR process for Covestro/XRG include:

• Market testing of the remedies, which should take one to two weeks.

• A state-of-play meeting, immediately following the market test.

• The EC’s drafting of its decision, which is likely to take several weeks.

• The review of that decision by DG Comp and the college of commissioners, which will take one week.