BASF Considers Raising Offer For Evonik

According to insiders, BASF will not soften its stance in acquiring its competitor Evonik. A source close to BASF told media on Friday, “It is reasonable to assume that the current offer is not the final bid.” Another source stated that if BASF and Evonik begin negotiations, a new offer might be presented.

The initial offer of over €10 billion was rejected.

BASF and Evonik, headquartered in Essen, confirmed exploratory talks in September. However, according to insiders, Evonik rejected an initial acquisition offer from its larger rival in late September. At the time, BASF’s bid was approximately €22.15 per share, valuing Evonik at around €14 billion including debt. Evonik deemed the price insufficient and turned down the offer. On Friday, this news drove up Evonik’s share price.

The status of the RAG Foundation is crucial.

In a potential merger, the RAG Foundation, Evonik’s major shareholder holding approximately 43% of the company’s shares, has played a key role. The foundation has confirmed that BASF has contacted it and expressed willingness to sell its entire stake in Evonik. Previously, the foundation had stated its intention to reduce its holding to a minority position of 25.1%. The RAG Foundation’s board comprises political and union representatives, chaired by CDU politician Armin Laschet, and includes North Rhine-Westphalia’s Minister-President Hendrik Wüst, the Minister-President of Saarland, the Federal Minister of Finance, the Federal Minister for Economic Affairs, and the chairman of the IG BCE trade union.

BASF may be committed to factories and work.

Insiders also stated that BASF is considering commitments to Evonik employees, including those related to plant locations. BASF welcomes Evonik’s major shareholders taking its acquisition interest seriously. A committee of BASF’s Supervisory Board is also discussing the progress. An Evonik spokesperson stated that no negotiations with BASF have taken place.

Politicians in North Rhine-Westphalia intervene; SPD proposes state equity stake

Concerned that the acquisition could lead to job cuts, politicians in North Rhine-Westphalia have intervened. The SPD parliamentary group has recommended that the state government examine the possibility of acquiring shares in Evonik, so that the RAG Foundation and the State of North Rhine-Westphalia together would hold more than 50% of the shares. State Economy Minister Mona Neubaur stated that Evonik is a major employer and a key component of the state’s industrial base, and that all parties must focus on the long-term implications for the location. The state government had previously asserted that “employment and the company’s independent development are beyond question.”

BASF CEO Markus Kamieth previously reaffirmed the company’s fundamental interest in acquisitions, stating, “A combination of BASF with another strong player in the specialty chemicals sector makes a lot of sense.” The chemical industry is currently facing a wave of large-scale mergers and acquisitions.