Zhongzhi Weiye Information | BASF Acquisition Stalls! Evonik Rejects BASF’s Initial Bid

On September 28, the chemical industry publication Chemical Week (CW), citing the Financial Times (FT), reported—based on information from insiders—that BASF SE had submitted an acquisition offer to Evonik Industries AG. The proposed deal valued Evonik at €10.3 billion, or €22.15 per share; however, Evonik has rejected this bid, bringing the exploratory merger talks between these two German chemical giants to a standstill. This offer implied an enterprise value for Evonik of approximately €14.2 billion. Negotiation Timeline: From Exploratory Discussions to Formal Termination As early as September 25, BASF and Evonik jointly confirmed that they had engaged in preliminary discussions regarding a potential merger. Evonik explicitly stated publicly that it is no longer conducting any negotiations with BASF, thereby formally closing the door on this round of merger talks. Prior to the announcement of the acquisition proposal, Evonik’s closing share price on September 24 stood at €18.07. BASF’s offer of €22.15 per share thus represented a premium of roughly 22% over the pre-announcement market price. Fueled by merger speculation, Evonik’s share price rose steadily following the news, closing at €19.84 on September 28. In contrast, market concerns over the financial strain posed by a large-scale acquisition triggered a modest pullback in BASF’s share price after confirmation of the talks: its closing price fell from €52.30 on September 24 to €50.28 on September 28. Valuation and Industry Benchmarking According to S&P Capital IQ data, Evonik’s estimated EBITDA for 2025 stands at approximately €1.71 billion. Based on this figure, BASF’s non-binding offer implies an enterprise value-to-EBITDA multiple of roughly 6x for Evonik’s 2025 EBITDA.

Zhongzhi Weiye Information | BASF Makes Major Concession in Evonik Acquisition Bid: Commits to Job Security Guarantees

Under Evonik’s current collective bargaining agreement, mandatory layoffs for operational reasons are prohibited across Germany until the end of 2032; workforce optimization may proceed only through voluntary departures, early retirement schemes, or severance payments. According to insiders, BASF acknowledges the binding nature of this clause and has committed not to weaken these employment protection provisions post-acquisition. When Reuters sought confirmation of this commitment from BASF, the company declined to comment. This latest development marks the most recent update in the ongoing merger discussions between Germany’s two largest chemical companies. Back in September, Evonik confirmed that BASF had proactively approached it to explore a potential acquisition, though formal negotiations had not yet commenced. Subsequent reports indicated that Evonik rejected BASF’s initial bid due to valuation concerns—the offer valued the company at approximately €10.3 billion, or €22.15 per share. On October 9, two sources close to BASF indicated that, should negotiations resume, BASF remains open to raising its offer; however, no revised formal proposal has yet been issued. Job security has now emerged as a central point of negotiation in this proposed transaction. The German chemical workers’ union IG BCE is demanding long-term job security assurances for Evonik employees and explicit investment commitments for Evonik’s German production sites. Similarly, the state government of North Rhine-Westphalia—where Evonik’s headquarters is located—has expressed concern about the potential impact of the acquisition. State officials have previously stated that the deal must not jeopardize existing jobs or Evonik’s independent development prospects. The RAG Foundation, Evonik’s largest shareholder, wields significant influence over this transaction. Hendrik Wüst, Minister-President of North Rhine-Westphalia, serves on the Foundation’s Supervisory Board; any transfer of the Foundation’s Evonik shares requires approval from this board. The state parliament is scheduled to hold a debate on the potential acquisition on October 14, during which the deal’s implications for employment and industrial investment will undergo further scrutiny. Notably, Evonik itself is already implementing a large-scale restructuring program.

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