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German chemicals company Covestro has agreed to “open” negotiations for a potential takeover of ADNOC after ADNOC raised its offer to around 14 billion euros.

ADNOC recently made a verbal offer for Covestro at 60 euros per share, people familiar with the matter said. That marks an uptick from June, when the company’s offer of 55 euros per share represented a 40 percent premium to Covestro’s undisturbed share price at the time.

“Adnoc’s interest in our company underscores our strong position,” Covestro Chief Executive Markus Steilemann said in a statement. Representatives for ADNOC declined to comment.

The latest offer equates to an equity valuation of nearly 11.6 billion euros in the company, before debt and other factors are taken into account.

Covestro warned that the possible terms of the deal would depend on negotiations, and that the company would give special consideration to ensuring that it could continue its sustainability strategy.

The strategy has been an issue in discussions between ADNOC and Covestro advisers, along with the Middle Eastern group’s willingness to invest in the German company’s future growth, the people said.

ADNOC’s proposal comes as the oil-rich emirate flexes its financial muscle by funneling years of excess hydrocarbon revenue into industries that could help wean the country off oil.

ADNOC has assembled a deal-making team of almost 50 under the leadership of Sultan al-Jabir, who is also in charge of the UAE hosting the COP28 climate summit.

The group is seeking about $50 billion in deals, including simultaneous deals with Brazilian petrochemicals maker Braskem and Austria’s OMV, as part of a drive to diversify and expand overseas.

Covestro, one of Germany’s largest companies and an insulating foam specialist, could help ADNOC expand its chemicals business as part of a wider diversification strategy.

Rising energy prices have boosted fossil fuel companies, but have created the opposite challenge for chemical companies such as Covestro.

The German company reported last month that sales fell to 3.7 billion euros in the second quarter, down more than 20 percent from a year earlier. Earnings before interest, taxes, depreciation and amortization fell 30 percent to 385 million euros.

Covestro, which was spun out of Bayer in 2015, has roughly halved its share price since its peak five years ago. Shares closed at 51.50 euros, up nearly 8 percent on Friday, after Bloomberg reported that Covestro was preparing talks.

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