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Investing.com -- The European Commission has opened an investigation into Abu Dhabi National Oil Co.’s 11.7 billion-euro ($13.74 billion) acquisition of German chemicals company Covestro, citing concerns about potential foreign subsidies.
The EU’s executive arm announced Monday that it is examining whether subsidies from the United Arab Emirates could distort the European market. The commission specifically mentioned an unlimited guarantee from the UAE and a committed capital increase by the state-owned oil and gas producer as areas of concern.
"The commission has preliminary concerns that the foreign subsidies may have enabled Adnoc to acquire Covestro at a valuation and financial terms that would not be in line with market conditions, and which could not have been matched by unsubsidized investors," the European Commission stated.
The deal was formally notified to EU regulators on May 15. The commission now has until December 2 to make a final decision on the transaction.
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