EU conducts in-depth investigation into German chemicals giant's 14.7 billion acquisition case involving subsidy disputes.

The European Commission recently announced that it has launched a deep investigation into the acquisition of German chemical giant Cognis by the Abu Dhabi National Oil Company (ADNOC) for 14.7 billion euros. The reason for the investigation is the concern that subsidies provided by the United Arab Emirates (UAE) could distort competition in the EU internal market. In October last year, ADNOC reached an agreement to acquire Cognis, which was its largest acquisition to date. The investigation is based on the EU's Foreign Subsidies Regulation, and preliminary reviews conducted since May indicate that ADNOC likely received "foreign subsidies" from the UAE government. These subsidies allowed ADNOC to offer valuations and financial conditions that did not align with market conditions, making it difficult for other potential investors without subsidies to compete fairly. Possible "foreign subsidies" include unlimited guarantees from the UAE government and ADNOC's commitment to increase capital in Cognis.