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BASF Sells Majority Stake in Coatings Business to Carlyle and Qatar Investment Authority

European M&A and Investment 2025-10-11 10:29:58

Image source: BASF

BASF has agreed to sell the majority stake of its coatings business to private equity firm Carlyle Group and Qatar Investment Authority. The business includes automotive OEM coatings, automotive refinish coatings, and surface treatment businesses, with a valuation of 7.7 billion euros. BASF will retain a 40% stake in the coatings business and will receive approximately 5.8 billion euros in pre-tax cash proceeds upon the completion of the transaction.

Carlyle will leverage its global industrial and carve-out experience to support the next phase of growth for BASF's coatings business. BASF will retain an equity stake in the coatings business and continue to build on its existing success. The transaction is expected to be completed in the second quarter of 2026, subject to customary regulatory approvals.

BASF began searching for buyers for its coatings division at the beginning of this year. This is part of the company's broader strategy to focus on business areas that are closely integrated and physically connected within its large global chemical integrated sites. This is an important step for BASF to unlock the value of independent businesses, and the company is rapidly implementing its "Winning Ways" strategy.

BASF stated that this transaction, along with the decorative paint business in Brazil sold to Sherwin-Williams earlier this year, will bring the enterprise value (including debt) of BASF's entire coatings division to €8.7 billion. This is approximately 13 times the adjusted EBITDA for 2024. The proceeds from the sale may enable the company to implement its announced stock buyback program of at least €4 billion earlier than planned, which was originally scheduled for 2027 to 2028.

BASF Coatings is a global leader in automotive OEM coatings and repair coatings, as well as surface treatment technologies for metal, plastic, and glass substrates, with widespread applications across various industries. This business operates in Europe, North America, South America, and the Asia-Pacific region, with projected sales of approximately 3.8 billion euros in 2024.

Carlyle will work closely with the BASF Coatings management team to enhance customer focus and support the future development of the business by investing in its commercial capabilities, innovation channels, and organizational structure. Carlyle has previously invested in related industry companies such as AkzoNobel, Axalta, and Nouryon, and will leverage its outstanding track record and extensive experience in successfully spinning off industrial and chemical assets to assist BASF's coatings business.

Dr. Markus Kamieth, Chairman of the Executive Board of BASF Group, stated: "We are pleased to collaborate with Carlyle, as their industry expertise, separation capabilities, and collaborative approach will contribute to the long-term success of BASF Coatings. By retaining a minority stake, we demonstrate our confidence in the future value creation and enhancement potential of the coatings business. The passion, expertise, and customer focus of our coatings team are the reasons that make this business exceptional."

Anup Kothari, a member of the Board of Executive Directors of BASF SE responsible for the Coatings division, said: "The transaction announced today opens a new chapter of opportunities for BASF Coatings, shaping a stronger future on the foundation of our existing success."

Martin Sumner, Head of Carlyle's Global Industrial Sector, and partner Tanaka Maswoswe stated: "BASF Coatings is an outstanding platform with leading technology, a world-class management team, strong customer partnerships, and a truly global footprint. We see a compelling opportunity to leverage our global platform to support this business in becoming an independent leader. This transaction reflects Carlyle's ability to execute complex separations in partnership with leading global companies."

Qatar Investment Authority CEO Mohammed Al-Sowaidi said, "Qatar Investment Authority is pleased to collaborate with Carlyle to support the next phase of BASF Coatings' continued growth. This investment aligns with Qatar Investment Authority's approach of investing in industry leaders and demonstrates our confidence in the long-term resilience of German enterprises."

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BASF Sells Majority Stake in Coatings Business to Carlyle and Qatar Investment Authority

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