BASF's €5.8 Billion Coatings Windfall Fuels Cost-Cutting Drive Amid Geopolitical Risks
Published on 06/18/2026 at 08:13 | Redaktion boerse-global.de
The chemicals giant is executing a sweeping portfolio overhaul and aggressive efficiency push in parallel, with the recent green light from Brussels for the sale of its Coatings business providing a substantial cash injection. The €5.8 billion pre-tax proceeds from the disposal to private equity firm Carlyle are expected to land within weeks, giving BASF ample firepower to fund its ambitious €12 billion shareholder return programme running from 2025 to 2028.
The European Commission granted its conditional approval for the transaction in early June 2026, more than seven months after the deal was first announced. To address competition concerns, Carlyle must divest Nouryon’s global polysulfide business, a key input for sealants used in the aerospace industry where BASF Coatings also operates. The enterprise value of the division stands at €7.7 billion, with BASF retaining a 40 percent stake after closing, which is slated for the second quarter of 2026.
That cash boost arrives as BASF presses ahead with its "CoreShift" programme, a radical cost-reduction initiative targeting a 20 percent cut in fixed operating costs within its core businesses by 2029, measured against the 2024 baseline. More than 2,800 positions have already been eliminated at the Ludwigshafen headquarters since the start of 2024. The restructuring goes well beyond headcount: the company is standardising IT systems globally and deploying artificial intelligence more aggressively, while shedding non-essential assets. The silicate business in DĂĽsseldorf is being sold to US-based PQ Corporation, with completion likely in the second half of 2026, and an expanded polystyrene (EPS) plant in Ulsan, South Korea, will close in mid-June.
Should investors sell immediately? Or is it worth buying BASF?
Chief executive Markus Kamieth has openly cautioned about a difficult second half of the year, pointing to escalating tensions between the US, Israel and Iran that could disrupt supplies of critical raw materials such as sulphur and helium. Any disruption would directly hit automotive production, one of BASF’s most important end markets. The broader European chemical industry is already under pressure from weak demand, high energy costs, Chinese export competition and bureaucratic burdens, according to industry association VCI, which described the start of the year as sluggish.
Despite the headwinds, BASF maintained its full-year guidance. For 2026, it still expects earnings before interest, tax, depreciation and amortisation (EBITDA) before special items in a range of €6.2 billion to €7.0 billion, with free cash flow between €1.5 billion and €2.3 billion. First?quarter results showed earnings per share rising to €1.06, up from €0.91 a year earlier, although revenue fell roughly 8 percent to €16.02 billion.
The share price currently trades around €49.40, having gained roughly 10 percent since the start of the year but remaining about 10 percent below its 52?week high of €55.05 hit in April. The ongoing buyback programme — the first tranche of up to €1.5 billion, running until the end of June 2026 — is part of a broader commitment to return at least €4 billion to shareholders through buybacks by the end of 2028, alongside an annual dividend of at least €2.25 per share.
A newly created "Core Transformation Office", led by Julia Raquet, is spearheading the execution of CoreShift. Investors will get the next concrete progress check in mid-July, when the half-year report is due. That release will show whether the cost-cutting programme is already leaving measurable traces on the bottom line, and whether management remains confident in its full?year targets. Beyond 2027, the planned initial public offering of BASF’s agricultural chemicals division offers a potential re?rating catalyst for the entire group.
Ad
BASF Stock: New Analysis - 18 June
Fresh BASF information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
Disclaimer regarding our articles: No investment advice, no buy or sell recommendation. Information on prices, companies, and markets is provided without guarantee; changes are possible at any time. Stock market transactions can lead to substantial losses. Our articles are created and reviewed in whole or in part automatically with the support of AI.
