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BASF Makes Takeover Approach to Rival Evonik to Consolidate Stressed European Chemical Industry
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BASF, the world's largest chemical company headquartered in Ludwigshafen, Germany, has approached rival Evonik and its largest shareholder, the RAG Foundation, with a merger proposal, according to sources. The deal, if completed, would broaden BASF's geographic and product portfolio and consolidate the pressured European chemical sector. Evonik, based in Essen, has a market value of €8.4 billion, with an enterprise value of about €12 billion including net debt. BASF, valued at €47 billion, has engaged multiple investment banks since early this year to evaluate the acquisition. Sources caution that while discussions are underway, a final agreement is not guaranteed. Evonik's shareholders and management need to be satisfied with the strategic synergy and acquisition premium. The RAG Foundation, holding 44% of Evonik, will be key to the deal's outcome. The acquisition is part of BASF CEO Markus Kamieth's strategy to integrate the fragmented European chemical industry, creating a German champion to better compete with Chinese firms like Sinopec and US rivals like Dow. The combined companies had €74 billion in revenue last year. The deal faces regulatory scrutiny, but the EU is increasingly supportive of creating larger, more competitive European champions. Overlaps in Germany and elsewhere could yield cost savings and joint expansion in Asia and the US.
Source report
According to sources familiar with the matter, BASF, headquartered in Ludwigshafen, Germany, has recently submitted a merger proposal to Evonik and its largest shareholder, the RAG Foundation. If the deal materializes, the world’s largest chemical company would broaden its geographic footprint and product portfolio, consolidating an industry currently under pressure.
Evonik, based in Essen, has a market capitalization of €8.4 billion. The transaction would require a significant acquisition premium, with an enterprise value—including net debt—of approximately €12 billion. BASF, valued at €47 billion, has been in contact with several investment banks since earlier this year to evaluate the acquisition. The potential deal remains under active consideration.
Sources caution that while discussions have begun, a final agreement is not guaranteed. Evonik’s shareholders and management will need to confirm strong strategic synergies with BASF and be satisfied with the acquisition premium. The stance of the RAG Foundation, which holds 44% of Evonik’s shares, will be critical to the deal’s success.
The acquisition represents a key move by BASF CEO Markus Kamieth to integrate Europe’s fragmented chemical industry. A merger would create a German national champion better positioned to compete with Chinese players such as Sinopec and U.S. rivals like Dow. The combined revenue of the two companies last year reached €74 billion.
The merger would face regulatory scrutiny, though the European Union has increasingly supported the creation of larger, more competitive European champions. The two companies have overlapping operations in Germany and other regions, offering potential cost-cutting opportunities, as well as avenues for joint expansion into Asian and U.S. markets.
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BASF confirms exploratory talks to acquire Evonik, outcome uncertain