Abu Dhabi’s state-owned energy giant Adnoc has received key unconditional antitrust approval from the European Commission for its proposed €14.7 billion ($16.3 billion) acquisition of the German chemicals group Covestro. This decision, granted late Tuesday, eliminates a significant regulatory hurdle, clearing the path for the largest international deal in Adnoc’s history.

The European Union concluded that the merger does not pose any competition concerns since both companies operate primarily in different segments of the chemical and petrochemical supply chains. Regulators noted that there is no risk of limiting competitors’ access to essential inputs or customers. Furthermore, authorities in South Africa and India have approved the deal without imposing any conditions.

This acquisition is part of Adnoc’s broader strategy to diversify beyond oil and establish a global presence in downstream and low-carbon sectors. Covestro, known for its strong presence in advanced materials and sustainable technologies, aligns strategically with Adnoc’s goals. Covestro is a leading global producer of polycarbonates, polyurethanes, and other performance materials, with products used in smartphone casings and lightweight vehicle parts, as well as high-tech applications like virtual reality systems. The company is also heavily investing in AI-driven research and development to enhance its innovation capabilities.

With over half of Covestro’s revenues generated from the Asia-Pacific and North American markets, this acquisition provides Adnoc with valuable access to global growth opportunities. Analysts predict a robust long-term outlook for the chemical sector, with global demand for petrochemicals expected to grow by 2% annually through 2050. This acquisition signifies a pivotal moment in Adnoc’s international expansion strategy, focusing on gas, LNG, chemicals, and clean energy, reflecting a broader trend among Gulf energy producers to diversify their portfolios amid the global energy transition.