BASF Considers Raising Offer To Acquire Evonik

According to insiders, chemical giant BASF will not back down in its bid to acquire rival Evonik. A source close to BASF told media on Friday, “It can be assumed that the current offer is not the final bid.” Another insider stated that if BASF and Evonik enter into negotiations, the offer could be increased.

The initial bid of billions of euros was rejected.

BASF and Evonik, headquartered in Essen, confirmed in September that they had held exploratory talks. However, according to insiders, Evonik rejected an initial acquisition offer from its larger rival at the end of September. 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. The news also caused Evonik’s stock price to rise briefly on Friday.

The stance of the RAG Foundation is key.

In a potential merger, the RAG Foundation, Evonik’s largest shareholder with approximately 43% of the shares, plays a key role. The foundation has confirmed being approached by BASF and stated that it is willing to sell its entire stake in Evonik. Previously, the foundation had consistently expressed its intention to reduce its holding to 25.1%, a blocking minority stake. The RAG Foundation’s board comprises politicians and union representatives, with CDU politician Armin Laschet serving as chairman. Other members include Hendrik Wüst, Minister-President of North Rhine-Westphalia; the Minister-President of Saarland; the Federal Minister of Finance; the Federal Minister for Economic Affairs; and the chair of IG BCE, the Industrial Union of Mining, Chemistry and Energy.

BASF may make commitments regarding its factory and employment.

Insiders also revealed that BASF is considering making commitments to Evonik employees, including regarding plant locations. BASF has welcomed the fact that Evonik’s major shareholders are taking its acquisition interest seriously. A committee of BASF’s Supervisory Board is also discussing the progress of this matter. An Evonik spokesperson stated that no negotiations with BASF have taken place yet.

Political intervention in North Rhine-Westphalia: SPD proposes state government equity stake

Concerned that the acquisition could lead to job cuts, political leaders in North Rhine-Westphalia have intervened. The SPD parliamentary group has proposed that the state government examine taking a stake in Evonik, so that the RAG Foundation and the state of North Rhine-Westphalia would jointly hold more than 50% of the shares. State Economy Minister Mona Neubauer stated that Evonik is a major employer in the state and a key component of its industrial base, emphasizing that all parties involved must consider the long-term impact on the company’s sites. The state government has previously declared: “Jobs and the company’s independent development are not up for debate.”

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

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