BASF's Evonik Approach Puts RAG-Stiftung in the Driver's Seat
Published on 09/27/2026 at 03:40 | Editorial boerse-global.de
BASF has confirmed it is exploring a potential tie-up with Evonik Industries, a move that would expand the Ludwigshafen group's footprint in specialty chemicals and rank among the most consequential German chemical transactions in years. The company said on Friday that both the progress and the outcome of the exploratory talks, which also involve the RAG-Stiftung, remain open.
The disclosure follows Evonik's own revelation a day earlier that it had received an unsolicited approach from BASF regarding a voluntary public takeover offer for all of its shares. No formal negotiations are currently underway, according to the companies, leaving the path from tentative contact to binding talks contingent on the terms on offer and the willingness of Essen-based shareholders to engage.
A 43% Stake and a Decisive Vote
Any deal hinges on the RAG-Stiftung, which holds roughly 43% of Evonik and therefore commands a blocking position over any major strategic move. Without the foundation's explicit consent, a takeover is effectively off the table. Whether formal talks even begin will depend on where the foundation's price expectations intersect with BASF's financial capacity.
The scale of the potential transaction is substantial. Media reports suggest a deal could run into the tens of billions of euros. Evonik carries a market value of around EUR 8.4 billion, while BASF is valued at EUR 45.03 billion. With Evonik's valuation already viewed by some specialists as ambitious, an overly generous takeover premium risks diluting the benefits for the Ludwigshafen buyer.
Shareholders Register Their Doubts
Investors greeted the news with restraint. BASF shares closed Friday down 2.6% at EUR 50.89, as the market moved quickly to price in the uncertainties such a large-scale move would entail. The timing is notable: BASF had spent recent years slimming its portfolio, progressively divesting parts of its paints and coatings business across 2025 and 2026. A purchase of this magnitude would cut against that recent focus and immediately raise valuation questions for shareholders.
Should investors sell immediately? Or is it worth buying BASF?
The Strategic Case and Its Costs
Advocates of a combination point to the chance to strengthen BASF in the higher-margin specialty chemicals arena. Together, the two companies generated EUR 74 billion in revenue last year, and a merged entity would cement its position in global chemical markets. Strategists also see meaningful savings in research and development and administration. Evonik is already deep into its own cost-cutting drive, targeting roughly EUR 400 million in savings in a first phase through the end of 2026. It also plans to shed 3,200 positions worldwide between 2027 and 2029, after having already eliminated around 2,000 administrative and 800 production jobs since October 2023. If BASF can mesh those efficiency measures with its own structures, the result could be a far more formidable specialty chemicals group over the medium to long term.
The bear case is equally concrete. Financing a deal in the tens of billions would weigh heavily on BASF's balance sheet, and in a chemical industry already facing a challenging economic climate, a large debt load could sharply curb financial flexibility. Operational complexity adds another layer: Evonik employs around 33,000 people worldwide, and merging two long-established groups would absorb considerable management capacity for years. Should the hoped-for synergies arrive more slowly than planned, or integration friction emerge, returns would come under pressure. Investors also worry that a costly takeover battle could crimp shareholder returns at BASF for years to come.
A Spinoff Running in Parallel
The Evonik overtures land amid sweeping internal change at BASF. Roughly two weeks ago, the company mandated banks for a planned IPO of its agricultural division, while BASF Agricultural Solutions presses ahead with an organizational overhaul to prepare for its gradual transformation into a standalone company. As part of that realignment, Leta LaRush will take over as Senior Vice President BASF Agricultural Solutions United States effective October 1. The new global organizational structure for the agricultural activities is expected to take effect on January 1, 2027, a setup management says will sharpen customer focus and ready the unit for its planned independence. The agricultural spinoff remains targeted for 2027.
Operationally, the group is advancing on other fronts as well. A little over three weeks ago, US partner Cheniere Energy reported the commissioning of BASF's Durasorb technology at its LNG facility, one of several steps showing the realignment is being pushed on multiple levels at once.
What to Watch
For now, market participants must weigh two distinct paths. As long as BASF shares can defend the EUR 50 mark, the stock's chart picture remains stable; a sustained break below that level would open the door to a test of deeper support zones. If the initiative collapses entirely, because the RAG-Stiftung refuses to sell or BASF deems the demanded premium too rich, the merger speculation would end abruptly, and relief over a spared balance sheet could underpin a swift recovery. If formal takeover talks do begin, proof of viable financing will likely determine where the shares go next.
Clearer insight into current operations arrives next month, when BASF reports third-quarter results on October 28. Until then, investors are likely to focus on signals out of Essen and from the RAG-Stiftung.
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