BASF €10.3bn bid rejected by chemical rival Evonik, FT reports

Investing.com -- Evonik Industries AG (ETR:EVKn) has rejected a €10.3 billion ($11.7 billion) takeover proposal from larger German peer BASF SE NA O.N. (ETR:BASFn), according to reporting by the Financial Times, setting the stage for potential friction among shareholders over the valuation of Europe’s embattled chemical sector.

Ludwigshafen-based BASF made an initial proposal of approximately €22.15 per share, the FT reported, citing people familiar with the matter. However, Evonik rebuffed the offer on the grounds that the valuation was insufficient to merit formal negotiations or grant due diligence access, the report noted.

A combination would represent an ambitious consolidation play by BASF Chief Executive Markus Kamieth, who seeks to scale European operations against aggressive competition from U.S. and Chinese rivals like Dow and Sinopec. Against a backdrop of elevated energy costs, global overcapacity, and persistent demand headwinds across Europe, industrial leaders have increasingly pointed toward sector consolidation as a structural necessity.

For its part, BASF reiterated its strategic rationale in a statement on Monday, noting that an acquisition would strengthen its core portfolio while maintaining that any potential synergies require active engagement from Evonik. Meanwhile, BASF investors have signaled caution, driving the company's shares down nearly 4% late last week amid concerns over execution risks and the financial burden of integrating a complex peer.

The ultimate outcome will likely depend on the RAG-Stiftung foundation, the state-backed entity holding a 44% stake in Evonik to fund former coal mining obligations. Given that its board features prominent political and labor figures, any prospective transaction will face strict evaluation regarding potential site closures, employment guarantees, and long-term industrial strategy.

Original Article

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