BASF advances talks on US$8B coatings sale to Carlyle Group

BASF will hold a 40% equity stake in the new company formed after the sale.

GERMANY – BASF SE has entered exclusive negotiations with Carlyle Group for the sale of its coatings business, valued at approximately US$8.09 billion. 

The move comes as the German chemical giant grapples with escalating energy costs across Europe. 

According to reports, Carlyle outbid several rivals in a competitive auction, positioning it as the frontrunner in what could become one of Germany’s biggest deals this year.

A BASF representative noted that while discussions are progressing, no final agreement has been reached.

 “We remain committed to exploring options that ensure the long-term viability of our operations,” the spokesperson added in a brief statement. Potential buyers had included a group led by KPS Capital Partners, alongside Lone Star Funds, Platinum Equity, and Akzo Nobel. 

Talks could still collapse, but analysts point to Carlyle as the most straightforward partner due to its focus on streamlined investments.

The coatings division, which supplies materials for automotive, industrial, and packaging applications, posted US$4.1 billion in sales last year. 

Proceeds from the transaction would support BASF’s plan to repurchase at least US$4.3 billion in shares from 2027 through 2028. 

High energy prices, intensified since Russia’s invasion of Ukraine, have squeezed the company’s margins. BASF trimmed its dividend by a third in 2024, and its stock has hovered at multiyear lows.

In related developments, BASF is reviewing strategies for its remaining coatings operations, with an update slated for the fourth quarter of 2025. 

The unit plays a key role in sustainable packaging solutions, including low-emission paints and eco-friendly barriers for food containers. 

Energy strains have prompted broader shifts in the sector. This summer, printing inks provider Siegwerk acquired specialty chemicals firm Allinova to expand its lineup of adhesives, water-based dispersions, and wax emulsions. 

The purchase strengthens Siegwerk’s push into green packaging innovations, targeting reduced plastic use worldwide.

European regulators are also scrutinizing energy-dependent deals. 

The European Commission launched a probe into Abu Dhabi National Oil Company’s takeover of Covestro, citing possible market distortions from UAE-backed subsidies like unlimited guarantees and capital injections.

 Meanwhile, the Commission’s Clean Industrial Deal aims to aid heavy industries in cutting carbon emissions through targeted funding.

To ease immediate pressures, its Affordable Energy Action Plan seeks to cap prices and lower utility bills for manufacturers.

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