14.7 billion euros! Covestro changed its ownership in the Middle East, and MDI was completely cut off on the same day.

There is widespread speculation in the sector that two of the world's leading MDI suppliers are experiencing capacity problems at the same time, possibly due to supply disruptions of carbon monoxide or chlorine. to MDI production, carbon monoxide is mainly utilized to the carbonylation interaction to synthesize isocyanates, while chlorine gaseous is utilized to create phosgene, a key intermediate. In the event of a shortage of any of these raw materials, the entire production chain will be forced to decrease or even stop production. It is worth noting that this is not the first time that North American MDI has experienced a supply crisis. From April to might 2024, BASF, Covestro, and Dow announced force majeure one after another. In just over a month, North American MDI production capacity was paralyzed. Several extensive shutdowns in the same region over the past two years due to raw material problems have exposed the deep vulnerability of the North American MDI supply chain.

Superimposed on the previous overhaul of the Gaisma MDI plant in Huntsman Louisiana, the above-mentioned MDI vegetation affected in North America due to force majeure, raw material constraints and overhaul factors involved a total capacity of greater than 1.1 million tons, accounting to nearly 70% of the total MDI capacity in the United States. Covestro has an MDI capacity of approximately 330000 tons/year at its Baytown, Texas base in North America, making it the third largest production site in the world. At present, the two companies have not disclosed the expected recovery time, however considering the systematic characteristics of the raw material supply issue, the market expects that the shutdown time might be longer.

The simultaneous problems with the Covestro and Dow MDI units are not isolated incidents, however are a concentrated manifestation of the systemic raw material crisis currently facing the U.S. chemical sector. In addition to the insufficient supply of carbon monoxide and chlorine, the US chemical sector is also facing the pressure of rising prices of basic chemical raw materials such as C3 (propylene) and benzene, which together erode the basic conditions to regional isocyanate production.

In addition to MDI, the production of TDI (toluene diisocyanate), polycarbonate, epoxy resin and other chemical items has also been affected to varying degrees.

On the same day that the North American MDI force majeure was declared, Covestro held its 2026 Annual General Meeting at the World Congress Center in Bonn, Germany, where all proposals submitted by the Board of Directors and the Supervisory Board were approved by the required majority of votes. Most notably, the General Meeting of Shareholders approved a mandatory takeover resolution under the German Stock Companies Act, thereby transferring the shares held by minority shareholders to the main shareholder, XRG P.J.S.C., based in Abu Dhabi, United Arab Emirates..

At the time of the general meeting, XRG had a 96.16 percent stake in Covestro, which met the mandatory acquisition limit under German law. According to the resolution, minority shareholders will receive a cash compensation of 59.46 euros per share, which is in line with the price announced by XRG when it formally submits its compulsory acquisition request on March 20, 2026. Dr. (Markus Steilemann), CEO of Covestro, said at the shareholders' meeting: "Despite the challenging market ecological stability in fiscal year 2025, we continue to promote Covestro to the future and firmly promote our transformation. With XRG as our partner, we can now further accelerate the implementation of our Sustainable Future strategy. the company law resolution on compulsory takeovers passed today will promote closer cooperation and speed up the decision-making process."

Dr. Rainer Seele, Chairman of the Supervisory Board of Covestro, also emphasized: "Covestro has a strong technical foundation, strong innovation capabilities and great possible in key markets of the future. The partnership with XRG will create new strategic opportunities to the company's prolonged development. I am convinced that this will put Covestro in a strong position to continued successful transformation."

In addition, the shareholders' meeting also elected Mercedes Alonso Benito, Guy Janssens, Khaled Salmeen and Rainer Seele as shareholders' representatives to the supervisory board. These four members were appointed by the District Court of Cologne, Germany, in December 2025 and are now elected by the annual shareholders' meeting to a term of about four years. They bring a wealth of expertise in the fields of chemicals, finance, energy and corporate governance, which will provide crucial support to the future research of Covestro.

According to the Group's dividend policy, Covestro will not pay a dividend in fiscal year 2025 due to a net profit of -0.644 billion euros in fiscal year 2025. This is the second year in a row that Covestro has not paid a dividend, reflecting the severe market challenges the company has faced in recent years. However, with the full ownership of XRG and the completion of the € 1.17 billion capital increase, Covestro's financial position will be significantly improved, providing solid financial support to accelerate its transition to a sustainable future.