BASF Takeover Approach
Evonik Confirms Unsolicited Takeover Approach From Chemical Giant BASF
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Key Points
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The RAG Foundation holds about 43% of Evonik, but has said it intends to reduce its stake to 25.1% over the medium term as it seeks to lessen its dependence on the chemical industry.
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The Financial Times report said Evonik, with a market capitalization of about €8.4 billion, would seek a substantial takeover premium; the company’s enterprise value, including net debt, was estimated at around €12 billion.
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One report put Evonik’s share-price rise at as much as 11% on Friday, while BASF shares fell by more than 2%.
Evonik confirmed Friday that it received a non-binding takeover approach from rival chemical maker BASF, but said no formal talks are underway. Market Screener reported the approach targets all of Evonik's shares through a voluntary public offer. The confirmation came after media reports that BASF had contacted Evonik and its largest shareholder, the RAG Foundation, which owns about 43% of the company.
Evonik's shares jumped as much as 11% on the news, while BASF shares fell more than 2%. Market Screener estimated Evonik's market value at €8.4 billion, with an enterprise value around €12 billion including debt. The terms of any potential deal remain unclear, and no negotiations have started.
RAG Foundation's Long-Term Exit Strategy
The RAG Foundation, Evonik's controlling shareholder, has signaled it wants to reduce its stake to 25.1% over the medium term. wallstreet-online.de reported the foundation disclosed this as part of regulatory filings related to the BASF approach. The foundation seeks to lower its dependence on the chemical industry rather than hold its current 43% stake indefinitely.
Market Reaction and Valuation Questions
The takeover speculation triggered sharp moves in both companies' share prices on Friday. Evonik climbed as much as 11%, reflecting investor appetite for a potential deal premium. BASF dropped more than 2%, likely due to concerns about acquisition costs and the scale of the transaction.
Evonik is expected to demand a substantial premium above current market value, according to reports. With a market cap near €8.4 billion and enterprise value around €12 billion, any agreed price would need to compensate shareholders for the intrinsic value of the business.
Why BASF May Be Looking to Consolidate
A BASF takeover of Evonik would combine two of Europe's largest chemical producers and create significant cost-saving opportunities through operations consolidation. The move reflects broader industry trends toward consolidation as chemical makers face margin pressures and rising regulatory costs.
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