German chemicals company Covestro has rejected the Abu Dhabi National Oil Company’s (Adnoc) initial takeover, citing the offer as ‘too low’, reported Reuters, citing two sources familiar with the matter.

Adnoc recently made a takeover proposal to Covestro worth more than €10bn ($11bn). The United Arab Emirates (UAE) company's offer included a per share price in the mid-€50s.

At that time, some of the sources were cited by Bloomberg News as saying that Adnoc is likely to keep operations of Covestro independent.

In a letter to Adnoc CEO Sultan Al Jaber, the German company said that the UAE oil major’s proposed valuation fails to provide ground for further talks, reported BNN Bloomberg, citing sources.

The sources said that Covestro could consider discussing a potential deal with Adnoc if the latter offered better terms.

Adnoc plans to assess the response of the chemical company prior to making its next steps, sources added.

Commenting on Covestro’s move, Union Investment fund manager Arne Rautenberg was quoted by Reuters as saying: "Covestro is a very well-positioned, cyclical company that is currently cheaply valued. It would probably only be a matter of price whether the existing shareholders would accept such a takeover offer."

Adnoc intends to boost its production capacity for crude, natural gas and chemicals, as well as low-carbon energy with an investment of $150bn (Dh550.88bn).

In 2022, Adnoc acquired a 24.9% stake in Austrian energy and chemicals company OMV from Mubadala Investment Company in order to increase its chemicals production.