Core Viewpoint - The European Union has initiated a review of the Foreign Subsidies Regulation to assess the impact of foreign subsidies on the internal market and gather feedback from various stakeholders [1][2] Group 1: Review Announcement - The review focuses on five key issues: evaluating foreign subsidies that distort the internal market, weighing the positive impacts of foreign subsidies against their negative effects, the EU Commission's self-assessment of potentially distorting foreign subsidies, the reporting thresholds for foreign subsidies, and the complexity and cost burden of the Foreign Subsidies Regulation on businesses [1] - Stakeholders, including companies, law firms, EU member states, chambers of commerce, individuals, and research institutions, can submit feedback to the EU Commission until November 18, 2023 [1] - A report will be submitted to the European Parliament and the European Council by the EU Commission in July 2026 [1] Group 2: Background Information - The Foreign Subsidies Regulation came into effect in January 2023 and began implementation in July 2023, requiring the EU Commission to review its implementation and execution every three years [2] - The regulation was introduced following a white paper published in June 2020, which highlighted the negative impact of foreign subsidies on competition within the EU market [1]

Core Viewpoint - The acquisition of Covestro by ADNOC faces challenges as the European Commission has initiated a "foreign subsidies" investigation to assess the compliance of the deal with the Foreign Subsidies Regulation (FSR) [1] Group 1: Acquisition Details - ADNOC plans to acquire all issued shares of Covestro for approximately €11.7 billion, with an additional €3 billion in debt, bringing the total transaction value to €14.7 billion (around ¥114 billion) [2] - Covestro will issue 10% of new shares to accept ADNOC's capital injection of €1.17 billion [2] - The transaction has already passed the traditional merger review process by the EU in May [2] Group 2: Regulatory Concerns - The European Commission's preliminary investigation indicates concerns that subsidies from the UAE may distort the EU internal market [1] - The investigation will evaluate whether the foreign subsidies received by ADNOC could lead to an acquisition at an inflated price, potentially hindering other investors from participating [1] - The EU will also assess the potential negative impacts of the merged entity's operations on the EU internal market post-acquisition [1] Group 3: Company Background - ADNOC, based in the UAE, aims to position its subsidiary XRG among the top five global chemical companies, making this acquisition a significant step towards that strategic goal [3] - Covestro, headquartered in Germany, was spun off from Bayer Group in 2015 and has projected sales of €14.2 billion for 2024, operating 46 production sites globally with approximately 17,500 employees [3]