Consolidation talk is stirring Germany's chemicals sector after a report said BASF has approached rival Evonik and its largest shareholder, the RAG Foundation, about a merger. The report pushes Evonik shares to a three-month high, while a person familiar with the matter says Evonik is currently not aware of any takeover approach by BASF.
Highlights
- BASF has approached Evonik and RAG Foundation with a merger proposal, speaking to banks about a possible takeover since early 2024.
- Evonik shares rose 8% and BASF gained 0.5% at 1158 GMT after the Financial Times merger report, reflecting investor optimism about a deal.
- A BASF-Evonik merger would be a major transaction in Europe's chemicals sector, but Evonik and the companies have not confirmed any formal approach.
Merger report and market reaction
As reported by Reuters, citing the Financial Times, BASF has approached Evonik and the RAG Foundation with a proposal for a merger, and the newspaper says BASF has been speaking to banks about a possible takeover since earlier this year.A source familiar with the matter tells Reuters that Evonik is currently not aware of any takeover approach by BASF. An Evonik spokesperson declines to comment on the report, while BASF cannot immediately be reached for comment.
Implications for Germany's chemicals sector
Investors react quickly to the report, with Evonik shares up 8% at 1158 GMT and BASF gaining 0.5%. The move suggests the market sees potential strategic value in a combination between two major German chemicals groups.Any tie-up between BASF and Evonik would rank as a significant deal in the European chemicals industry, given the scale of both companies and the involvement of Evonik's largest shareholder. For now, the report and the differing accounts from the Financial Times and the person familiar with the matter leave the status of any potential transaction unclear.
Our earlier coverage of Volkswagen’s restructuring outlined how the automaker was moving into a decisive phase, with supervisory board talks and union negotiations shaping planned job cuts and plant strategy in Germany. We also noted that the overhaul extends beyond the domestic footprint, with capacity reductions across Europe and China and unresolved decisions on U.S. production and model positioning.
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