Creeping industrial decline
As Germany strengthens economic ties with the United Arab Emirates, the UAE corporate takeover of a major German company marks a power shift. The UAE supports the genocidal RSF militia in Sudan.
ABU DHABI/BERLIN (own report) – Holding intensive talks in Abu Dhabi, German Economics Minister Katherina Reiche has agreed closer relations with the United Arab Emirates – despite the role played by the UAE as the main supporter of the genocidal RSF militia in Sudan. The talks were partly about future plans for German access to green hydrogen. The Emirates are in the process of becoming one of the most important hydrogen producers. But Reiche also negotiated the imminent Emerati acquisition of the former DAX-listed company Covestro by the Emirati group Adnoc. This is to be green-lighted by supervisory authorities. Whereas the Emirates used to invest in Germany in ways that lifted German companies out of crisis by offering an infusion of cash, this time things are quite different. Covestro, a legacy German company (formerly Bayer MaterialScience) making plastics, is being integrated into an Emirati group with the aim of making the latter a world player. The take-over illustrates how profoundly the global balance of power is shifting. Berlin currently has to “come cap in hand” to the rising power of Abu Dhabi, according to comments made in Reiche’s delegation. In fact, the United Arab Emirates has long been self-confidently pursuing an independent foreign policy – made possible in part by cooperation with Germany.
Retrofitting for the post-fossil fuel era
At the beginning of the week Germany’s Minister for Economic Affairs, Katherina Reiche, held talks in the United Arab Emirates on the future supply of green hydrogen. The Emirates are striving to become one of the world’s most important exporters of hydrogen. With this move they want to secure a strong position on the global energy market for a post-fossil fuel era. Initially, some of the hydrogen will still be derived from natural gas (known as ‘blue hydrogen’). But in the long term, the plan is to switch completely to ‘green hydrogen’, i.e. produced from renewable energy sources. The Emirates are in competition here with Saudi Arabia, Oman and others who are keen to take advantage of their geographical location. They have, of course, an abundance of sunshine, favourable for generating renewable energy.[1] For Berlin, tapping into the Emirates’ own resources, in this case energy supplies, is still largely in line with traditional patterns of economic advantage in which countries beyond the Western industrial centres primarily function as suppliers of raw materials – including energy – and as lucrative sales markets for finished goods. And German corporations are in fact earning good money by supplying technology for the development of the Emirates’ burgeoning hydrogen industry.[2]
Injections of Arab cash
Yet relations have change quite markedly when it comes to the second set of topics negotiated by Economics Minister Reiche in the Emirates: Emirati investment in Germany. Traditionally, when German corporations needed fresh capital, they could often fall back on funding from the Arab Gulf states without having to make any special concessions. A prime example was the entry of the state-controlled investment vehicle Aabar Investments from Abu Dhabi into Daimler in 2009. At the time, Daimler had suffered significant losses in sales and profits as a result of the global financial crisis. To find a way out of its difficult situation, the German automotive group was urgently seeking new investors. In this situation, Aabar Investments stepped in and acquired a 9.1 per cent stake in Daimler for 1.95 billion euros. Boosted by the fresh funds, Daimler were able to stabilise the business and push ahead with its technological development.[3] Around three and a half years later, when the German company had overcome its deep crisis and was once again generating substantial profits, Aabar Investments – the fund has since been absorbed into the Mubadala Investment sovereign wealth fund – withdrew from Daimler, selling its entire stake.[4]
Now ‘cap in hand’?
Today, a decade and a half later, Emirati foreign investment in Germany takes place in a completely different context. This is demonstrated by the imminent takeover of the German company Covestro by Adnoc (Abu Dhabi National Oil Company). Covestro was spun off from Bayer AG in 2015 as Bayer MaterialScience, the plastics division of the parent company. Like almost the entire German chemical industry,[5] Covestro is in serious trouble. Group sales fell by 12 per cent to 3.2 billion euros in the third quarter of 2025. All in all, the company posted a quarterly loss of 47 million euros, compared with a profit of 33 million in the same period last year.[6] Covestro CEO Markus Steilemann, who is also president of the German Chemical Industry Association (VCI), admitted in September, “The industry is on the brink of collapse.”[7] Whereas Aabar Investments acquired a relatively small stake in Daimler in 2009 to pump money into the group, Adnoc is now in the process of taking over Covestro in its entirety. Reiche’s job in Abu Dhabi is to negotiate the regulatory aspects of this deal at the political level. “It is a sign of the creeping relative decline of our industrial base,” noted a member of the German delegation, “that we are now coming cap in hand.”[8]
Contributing to Emirati expansion
So while Daimler was able to continue its own activities completely unchanged after Aabar Investments offered fresh funds, this is no longer the case for Covestro, at least in the long term. The business media are reporting that, as part of the take-over deal, Adnoc has assured the German group that it will not merge Covestro with another company for the time being. But even if the company will initially remain in its current form, this commitment is reportedly valid only until the end of 2028.[9] Adnoc, for its part, comes from the oil industry and wants to radically restructure its business in preparation for the end of the fossil fuel era. It is bundling its activities beyond oil and gas, especially its activities in the chemical industry, which are run within a new subsidiary called XRG – an investment company that will oversee the new acquisition, Covestro. The plan is for XRG to receive up to 150 billion US dollars from Adnoc to continue its path of rapid expansion. The company is thus set to become one of the world’s top-five chemical companies.[10] The long-term role of Covestro in the Emirati company’s global expansion plans is uncertain. Actually, its future is just as uncertain as the future of all those companies around the world that were once taken over by German corporations. The roles are reversing.
A new autonomy
This economic ambition is accompanied by profound shifts in Emirati foreign policy as a whole. The Emirates, whose most important trading partner by far is now China, have long been cooperating with the People’s Republic in critical high-tech areas such as the development of UAE’s 5G networks, using Huawei technology. Abu Dhabi and Beijing are even working together on certain areas of military and armaments policy.[11] The Emirates have joined the BRICS alliance and are also affiliated to the Shanghai Cooperation Organisation (SCO) as a partner state. Abu Dhabi has sought to gain a certain degree of control – including military control – over important maritime trade routes, not least the Red Sea.[12] This is what prompted them to join the Saudi-led intervention in the war in Yemen, a key player bordering the Red Sea. The Emirates’ goal has been to gain influence over important sections of the coastal regions. And UAE plans to secure a strong position on the Red Sea is, in turn, one of the motives that drove them to support the Rapid Support Forces (RSF) in Sudan.
Support for genocidal militias
Emirati armed forces were already involved in serious war crimes in the Yemen war. They are now supporting the RSF’s genocidal campaigns in Sudan. The militias are being equipped with Emirates-supplied weapons, including weapons procured from European countries. For example, arms supplied by the United Kingdom to the Emirates have turned up in Darfur. The same applies to ammunition that Bulgaria had previously passed on to Abu Dhabi.[13] It is not yet known whether German arms have also ended up in the hands of the RSF. We do know, however, that the Emirates are a major buyer of German military equipment.[14] And Emirati support for the RSF's genocidal war in Sudan is not preventing the German government from deepening its relations with the country, especially at an economic level. The visit of Germany’s Economics Minister Reiche to Abu Dhabi earlier this week is further evidence of this close relationship.
[1] Heena Nazir: VAE verfolgen bei Wasserstoff ambitionierte Pläne. gtai.de 07.05.2025.
[2] Klaus Stratmann: Praxistest für Wasserstoff: Deutsche Industrie bekommt Hilfe aus den Emiraten. handelsblatt.com 21.03.2022.
[3] Abu Dhabi steigt bei Daimler ein. tagesschau.de 22.03.2009. See: Feudalinvestoren.
[4] Abu Dhabi verkauft seine letzten Daimler-Aktien. spiegel.de 11.10.2012.
[5] See: An economic power in decline.
[6] Covestro schreibt Nettoverlust – Jahresziel eingegrenzt. handelsblatt.com 30.10.2025.
[7] Chemie & Pharma Summit: Auftakt mit Bundeskanzler Merz. Mut zu Reformen: Die Zeit drängt. presseportal.de 24.09.2025.
[8] Michael Bröcker: Reiche am Golf: Wie die Wirtschaftsministerin in den Emiraten um günstiges Gas und frisches Geld buhlt. table.media 17.11.2025.
[9], [10] Bert Fröndhoff: Adnoc und OMV formen 60 Milliarden Dollar schweren Chemiekonzern. handelsblatt.com 04.03.2025.
[11] Adam Lucente: China, UAE hold air force drills in Xinjiang as defense relations grow. al-monitor.com 11.07.2024.
[12] Jun Moriguchi, Ito Mashino: The UAE’s strategy in Africa. Mitsui & Co. Global Strategic Studies Institute Monthly Report. January 2025.
[13] Seb Starcevic: Sudan urges EU: Stop selling arms to UAE amid massacre claims. politico.eu 17.11.2025.
[14] See: “Konstruktive Kräfte”.
