BASF, the world's largest chemicals group, has reportedly made an approach to German rival Evonik Industries AG and its largest shareholder, the RAG-Stiftung foundation, regarding a potential takeover. This move is seen as an ambitious push to consolidate the struggling European chemicals sector, which is grappling with high energy costs and Chinese overcapacity. While discussions are still exploratory and there's no guarantee of an agreement, BASF confirmed these talks with RAG-Stiftung and Evonik, stating that the outcome remains open at this stage.
A potential transaction would represent a significant consolidation, given Evonik's market capitalization of approximately $9.09 billion (€8.4 billion) and an enterprise value of around $13.63 billion (€12 billion) including net debt. BASF, with a market valuation of roughly $51.14 billion (€47 billion), has been consulting with investment banks about the deal structure since earlier in the year. The strategic rationale for such a merger centers on achieving greater scale; a combined entity would boast joint annual revenues of approximately $80.45 billion (€74 billion), potentially better positioning it to navigate global competition from state-backed Chinese rivals like Sinopec and American chemical major Dow.
The proposed takeover aligns with BASF CEO Markus Kamieth's strategy to streamline operations, reduce overheads, and reorient the company's portfolio towards higher-margin markets. This follows BASF's recent divestitures, including the $8.37 billion (€7.7 billion) sale of a majority stake in its automotive coatings unit to Carlyle and plans for a 2027 listing of its agricultural solutions division. For the deal to proceed, securing support from the RAG-Stiftung foundation, which holds a critical 44% controlling stake in Evonik, is essential. Evonik's shares saw an increase of over 7% in Frankfurt trading following the report, while BASF's equity slightly dipped.
Despite potential antitrust scrutiny in domestic markets, European regulators have shown increased willingness to allow regional consolidation to foster globally competitive industrial leaders. Beyond regulatory hurdles, Evonik's leadership would likely demand a substantial takeover premium and clear evidence that integrating its specialty additives and polymers businesses into BASF would deliver long-term strategic value. However, on September 28, 2026, sources close to the negotiations indicated that Evonik rejected BASF's $11.7 billion (€10.3 billion) takeover bid, considering it too low. The offer was reportedly about $24.03 (€22.15) per Evonik share. This rejection, if confirmed, highlights the challenges in valuing and integrating such large chemical entities, even amidst a tough macroeconomic environment where both companies have been undertaking aggressive cost-cutting measures, including Evonik's plans to eliminate over 3,200 jobs.
