Covestro Nears Delisting as Majority Shareholder Moves to Force Out Minority Holders

The release of Covestro’s 2025 annual report paints a stark picture of a challenging year for the Leverkusen-based polymer manufacturer. Amid significant operational headwinds, the company’s majority shareholder, XRG, is advancing plans to squeeze out remaining minority investors, setting the stage for a full stock market exit.

Financial Performance Under Severe Pressure

Covestro’s financial results for 2025 showed considerable strain. Group revenue declined by 8.7% to €12.9 billion, driven primarily by lower selling prices across all regions and adverse currency exchange effects. The drop in EBITDA was even more pronounced, falling 30.9% to €740 million.

The company’s net income sank further into negative territory, recording a loss of €644 million, compared to a loss of €266 million the previous year. Free Operating Cash Flow also turned sharply negative, coming in at minus €283 million.

Management attributed this weak performance to a confluence of factors: volatile geopolitical conditions, persistently soft demand, and intense competitive pressure. A fire at the Chempark Dormagen site provided an additional setback. A depressed pricing environment and overcapacity in key product segments continued to compress margins and profitability.

Leadership in Transition and Strategic Moves

In a significant development for corporate governance, CEO Dr. Markus Steilemann has announced he will not seek to extend his contract beyond May 2028. Separately, CFO Christian Baier will depart the company in September 2026 at his own request. The supervisory board has stated it will manage an orderly succession process for both roles.

Despite the operational difficulties, Covestro is proceeding with strategic acquisitions. In August 2025, the firm signed an agreement with Vencorex to acquire two production sites for HDI derivatives in Thailand and Texas. This transaction, expected to close in the first half of 2026, is intended to bolster its production network for aliphatic isocyanates.

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Furthermore, Covestro, together with Fertiglobe and TA’ZIZ, has inked a memorandum of understanding to explore strategic opportunities in ammonia supply, with a specific focus on low-carbon and green ammonia.

Dividend Suspended and Cost-Cutting Progress

As a direct consequence of the negative group result, Covestro will not pay a dividend for the 2025 financial year. The company’s ongoing STRONG transformation program, however, is showing initial success, having already delivered approximately €275 million in savings by the end of 2025. The program targets annual savings of €400 million by the end of 2028.

The Path to Delisting

The move toward leaving the public markets has been systematically prepared. XRG, which now holds approximately 95% of Covestro’s shares, has met the legal requirements to initiate a statutory squeeze-out. The company has announced it will put this proposal to a vote at the Annual General Meeting in May, with the full support of the management and supervisory boards.

This follows Covestro’s earlier downgrade in February from the Prime Standard to the General Standard on the Frankfurt Stock Exchange, a move that relieved it of numerous transparency and reporting obligations. A successful squeeze-out would complete the delisting process.

Cautious Outlook and Future Focus

Looking ahead to 2026, management anticipates EBITDA to be roughly in line with the prior year’s level. A sustained recovery in global demand is not yet visible, with the competitive landscape expected to remain difficult due to overcapacity, pricing pressure, and increasingly protectionist trade policies.

The company indicated that the flexibility gained from a potential delisting would be used to accelerate investments in the circular economy, digitalization, and artificial intelligence. The decisive vote on the company’s stock market future will take place at the May shareholder meeting.