ADN

ADNOC - Abu Dhabi National Oil Company for Distribution

AEA006101017

ADNOCDIST

ADNOCDIST

In recent days it became quite quiet about the rumors of the acquisition of $1COV (-0,15%) .

In the meantime I am skeptical whether $ADNOCDIST meanwhile is willing to make a higher offer. Personally, however, I think that rather not.

Why?

Out of personal interest, I got into $BRKM5 (-3,35%) in December. It opened up a solid product portfolio in important niches for industrial production. Worth noting the large market shares in polypropylene, also bio-based, and ethylene crackers in Mexico. My entry price was 3.60€.

A few weeks later $ADNOCDIST with $APO (+3,45%) a takeover offer with a premium of 157% at the then price of 27.60 BRL.

In the meantime, however, this takeover is in the stars, as the two investor groups disagree on the financing.

For this reason, I took profits of about 50% this week and will nevertheless continue to monitor the situation, as it will definitely provide impetus for the Covestro takeover.

I reinvested the liquidated position in First Majestic $FR (+1,5%) , the German SmallCap Pferdewetten.de $EMH (+4,03%) (You wouldn't believe how popular horse racing is.) , and the problematic chemical giant Lanxess $LXS (+1,86%) whose portfolio is now worth more than its market capitalization. This does not even include the tangible assets of the industrial plants and the supply contracts with very well-known customers.

Even if the chemical industry is hard hit at the moment, it remains one of the mainstays of a modern civil society, along with the metal and electrical industries. If the apocalypse does not occur, we will be able to benefit from good earnings and therefore also good dividends in the long term.

Global chemical sell-off?

It was basically predictable that Western chemical producers would now be attractive to heavy "cash holders" in the wake of falling stock markets.

Insiders are predicting a takeover of $1COV (-0,15%) by $ADNOCDIST assume.

The oil company of the emirate Abu Dhabi already crossed my way on the stock exchange only some time ago.

My speculation at the time was that the takeover of $BRKM5 (-3,35%) . Later, the interest in Braskem was also proven by ADNOC.

A takeover with an offer to Covestro would have real chances from about 60€/share. Therefore, have fun to the gamblers. 👍

However, it remains to be seen how politics will behave. Here, one has clearly maneuvered oneself into a dead end.

But what would the economic consequences be in Germany?

Personally, I actually think that there is a certain tactic behind the decision to buy plastics producers.

With the takeovers of the two groups, a very large part of German plastics production would be under control and, thanks to the domestic group's cheaper oil and gas contracts, it would be able to exert a certain pricing power, which could certainly pose a threat to its competitors. In addition, further capital outflows would be shifted abroad. This is the next potential nail in the coffin for the Leverkusen site. A collective bargaining agreement for current employees would probably cease to apply in a similar way. However, this can only be assessed once a takeover has been negotiated at all, and of course depends on Covestro's integration into the ADNOC Group.

How realistic do you think a takeover of the German chemical giant is? Will further offers to German energy-intensive companies follow?

Opening of a first position with the Danish cable specialist. The order situation is outstanding and the interest in NKT's portfolio seems unbroken.

$NKT (+3,29%) is a supplier of various direct current and alternating current solutions. It serves both the onshore and offshore markets.

Background for an entry:

• 04/24 - North Sea Summit: government leaders sign a memorandum of understanding to build wind farms in the North Sea with a capacity of up to 300 GW.
• Business should grow even more rapidly by 2035. Boosted by European utilities' declarations of intent in solar and wind energy.
• Transnational power transmission becomes more significant for the energy transition due to efficiency in southern areas.
• Today an unwarranted sharp discount due to CEO change.
• Business is likely to be massively driven and subsidized by the government, so no slowdown is expected even in the event of a recession.

Away from that, I needed a new position in the portfolio, since $BRKM5 (-3,35%) currently ahead of the likely sale to $ADNOCDIST and $APO (+3,45%) stands.