BASF proposes takeover of German chemical rival Evonik, Financial Times reports

Investing.com -- BASF SE NA O.N. (ETR:BASFn) has submitted a takeover proposal to German rival Evonik Industries AG (ETR:EVKn), according to reporting from the Financial Times, marking an ambitious push by the world’s largest chemicals group to consolidate a struggling European sector. The Ludwigshafen-based chemical giant recently approached both Evonik management and its primary shareholder, the RAG-Stiftung foundation, to present the potential combination.

A transaction would represent a major consolidation exercise, given Evonik’s market capitalization of €8.4 billion and an enterprise value of approximately €12 billion including net debt. BASF, which carries a market valuation of roughly €47 billion, has been consulting with investment banks regarding the takeover structure since earlier this year, though sources cautioned that preliminary discussions may not result in a definitive agreement.

For BASF Chief Executive Markus Kamieth, the move aligns with broader efforts to streamline operations, reduce overhead, and reposition the group’s portfolio toward higher-margin markets. The approach follows recent portfolio reshaping at BASF, including the €7.7 billion sale of a majority stake in its automotive coatings unit to Carlyle and preparations for a planned 2027 listing of its agricultural solutions division.

Any prospective transaction hinges on securing support from the RAG-Stiftung foundation, which holds a critical 44% controlling stake in Evonik. German market reaction was immediate following the report, with Evonik shares rising more than 7% in Frankfurt trading while BASF equity slipped nearly 2%.

Despite potential antitrust scrutiny in domestic markets, European regulators have recently signaled an increased willingness to tolerate regional consolidation to foster globally competitive industrial leaders. Beyond regulatory hurdles, Evonik leadership would require a substantial takeover premium alongside clear evidence that integrating its specialty additives and polymers businesses into BASF delivers long-term strategic value.

The consolidation attempt arrives against a tough macroeconomic backdrop for European chemical manufacturers, which continue to grapple with volatile energy costs and weak demand. Both companies have resorted to aggressive cost-cutting measures, with Evonik recently announcing plans to eliminate over 3,200 jobs as part of its own ongoing operational restructuring.

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