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Size of premium may increase pressure on management and biggest shareholder

Evonik has rejected a €10.3bn offer from its larger German rival BASF, sparking a potential takeover battle amid a push for mergers in Europe’s struggling chemicals industry.

Ludwigshafen-based BASF recently offered about €22.15 per share as an initial proposal, according to people familiar with the matter. But Evonik said the bid was too low to warrant formal negotiations or to allow its competitor to carry out due diligence, they added.

The bid would mark a nearly 29 per cent premium to Evonik’s share price last Monday before speculation about takeover interest became public. The offer would give Evonik an enterprise value of about €14.2bn, according to Bloomberg data.

The FT reported last week that BASF had approached Evonik about a possible takeover but details of the price offered have not previously been made public.

The size of the premium may increase pressure on Evonik’s management and its biggest shareholder, the RAG-Stiftung foundation, to justify their unwillingness to engage. Evonik’s shares were trading at €19.29 on Monday afternoon.

Investors in BASF, whose shares fell 3.6 per cent on Friday when the approach became public, are also likely to seek its explanation for pursuing a costly and complex merger that would expand its geographic and product mix.

A potential acquisition of Evonik would “strengthen and complement BASF’s core businesses and we would be disciplined in our approach”, the group said in a statement on Monday, adding that any synergies “can only be validated with the engagement of Evonik”.

Evonik confirmed last week that it had received a “nonbinding” takeover approach but that “currently there are no talks taking place”. BASF, which has a market value of about €44bn, said at the time it had held “exploratory talks” with the RAG-Stiftung foundation and Evonik, adding that the “course and outcome” of the discussions “remain open at this stage”.

A takeover would be a bold move by BASF chief executive Markus Kamieth to consolidate Europe’s fragmented chemicals industry and build a company that could better compete with Chinese rivals, including Sinopec, as well as American competitors such as Dow.

But any tie-up could also lead to job cuts and asset sales to remove overlaps between the two businesses. Shareholders, management and politicians will have to weigh the benefits of building a Germany-based champion with combined revenues of €74bn against the risks of a complex merger and associated cost cuts.

The position of RAG-Stiftung, which has a 44 per cent stake in Evonik, will be key to whether any deal is reached. The foundation was created in 2007 by the German government, states and trade unions to manage the costly phasing-out of the country’s hard coal mining industry.

RAG’s board of trustees includes Hendrik Wüst, premier of North Rhine-Westphalia who is seen as the country’s “chancellor-in-waiting”, German finance minister Lars Klingbeil and Katherina Reiche, the economy minister.

Michael Vassiliadis, head of the IGBCE chemicals and energy union, is also a member of RAG’s board of trustees as well as a supervisory board member at BASF.

Earlier this year, Vassiliadis called for “concerted consolidation” to support the sector in the long term. He has recused himself from decision-making about the potential takeover, said people familiar with the matter.

But Vassiliadis warned on Monday that a BASF-Evonik combination would not benefit workers and production sites simply by creating a larger company.

He called for commitments on investment and the future of German and European sites. “Both companies should be careful not to turn the screw too far,” he said.

Evonik is run by interim chief executive Claus Rettig, who took over after Christian Kullmann stepped aside in August due to illness. Kullmann predicted in May that the European chemical industry would see significant consolidation.

Germany launched a national strategy in March to help turn around the industry, which faces high energy costs, global overcapacity, weaker demand and rising overseas competition.

Both BASF and Evonik have been restructuring to focus on their core businesses. BASF, which has more than 100,000 employees in more than 90 countries, has been selling peripheral assets and cutting costs and jobs to boost profits.

Evonik, which operates in more than 100 countries with about 31,000 employees, is cutting jobs, closing plants and selling non-core assets.

Evonik and RAG declined to comment.

The Prime Minister's Office also recommends against approving the Zim deal under any framework with conditions ■ The significance of the recommendation, if accepted: the buyers of Zim — Germany's Hapag-Lloyd and FIMI — will not be permitted to submit any improved framework

By Nati Tucker

18:20 • September 28, 2026

Is the Zim deal heading for collapse? The Prime Minister's Office today (Monday) issued an opinion that completely rejects the Zim deal. The position technically addresses the original framework, but it is firm and unambiguous, and apparently also removes from the agenda the improved framework that the buyers, Hapag-Lloyd and FIMI, want to present.

The opinion from the Infrastructure Division of the Prime Minister's Office states that Zim Israel is indeed expected to begin operating without financial debt, with significant equity and protective mechanisms in its early years — however, this stability relies considerably on arrangements with Hapag-Lloyd, including commitments for capacity purchase, container availability, operational services, and connectivity to the global network. At the same time, the business plan assumes that within a few years, Zim Israel will replace a significant portion of this activity with independent commercial activity, and the contractual protective mechanisms will gradually decrease accordingly.

The opinion continues: the main risk is not the reduction of protections itself, but the dependency on the assumption that the pace of building independent activity will be fast enough to compensate for their reduction. A gap between the rate of acquiring independent customers and the rate of reduction in support from Hapag-Lloyd could expose the company to harm to revenues and profitability precisely during its establishment years.

According to the opinion from the Prime Minister's Office, even from a national perspective, the framework does not adequately address the interests that the special state share was meant to protect: the company will rely on parties not subject to the special state share for containers, connectivity, and operational services; it will not have an independent line to Asia and the Far East at the time of establishment; its ability to maintain the fleet over time depends on significant capital investments; and some of the knowledge and capabilities required for its independent operation have not yet been secured in a binding framework.

The update between the parties dated September 14, 2026, regarding the management of ships within Zim Israel and the examination of opening a line to the Far East indicates a possibility of narrowing some of the gaps, but both issues have not yet been secured in a binding contractual commitment. The central problem with the framework is not the existence of business risk itself, but the gap between the corporate structure and the operational and strategic reality.

Zim Israel will be an Israeli company owned and controlled by FIMI fund, but Israeli corporate control does not guarantee operational and strategic independence. A substantial part of its operational and commercial capabilities will continue to depend on Hapag-Lloyd, a foreign company not subject to the special state share. After the deal's completion, the state will thus remain with a special state share in an Israeli company, while a substantial part of the conditions required for its ability to operate over time and fulfill its national role will depend on an entity the state has no dealings with.

"In our view," the Prime Minister's Office writes, "this gap is a material gap in the core interests that the special state share was meant to protect, and does not justify approving the deal in its current format. There is no room to rely on future commitments whose existence and enforcement effectiveness will only become clear after the deal's completion, when the state's ability to influence the deal's structure will be significantly diminished."

The Prime Minister's Office also recommends against approving the deal under any framework with conditions — a recommendation whose meaning is also to not allow the Zim buyers to submit any improved framework.

"In our view, there is no room to rely on future commitments whose existence and enforcement effectiveness will only become clear after the deal's completion, when the state's ability to influence the deal's structure will be significantly diminished" — so states the recommendation from the Economics and Infrastructure Division of the Ministry.

The hottest tool in artificial intelligence right now is arguably the consumer agent, software that essentially functions as a digital personal assistant.

And one of the buzziest start-ups in the business, Instinct, plans to announce on Monday that it has just completed a big fund-raising round, DealBook is first to report. The company is seeking to compete against trillion-dollar competitors like Meta.

Instinct has raised $1 billion at a $10 billion valuation. The fund-raising comes almost exactly one month after Instinct raised $250 million at a $2.5 billion valuation. Investing in the round announced on Monday were Benchmark Capital, Sequoia Capital and Coatue.

The company is really young. Instinct, whose platform is built primarily on open-weight models, was founded last year and went into beta testing in February. (The tool is still by invitation only.) It has just 14 employees.

Its founder, Noah Shinn, is a 23-year-old dropout from Northeastern University who used to be a research scientist at another hot A.I. start-up, Sierra.

Instinct has been ahead of the curve on the agent frenzy. Users can communicate with their Instinct agents via text, email or WhatsApp and ask them to manage their calendars, book tickets, negotiate and pay bills, and more.

Over the last several months, the company has added features including recognizing a user’s location and then making suggestions of activities and allowing users to coordinate their Instinct agents with other users’.

Most of the new money will go toward more computing power, an increasing expense for A.I. companies. Users noted in recent weeks that the tool said “responses may be slower” because it was running at full capacity.

Instinct has been criticized over its handling of privacy, with some people pointing to what they say are overly broad terms of service. Others have complained that the tool is vulnerable to phishing and that it has taken actions without their consent (a somewhat common problem with agents).

The big challenge is competition. This month, Meta released its own agent, Muse, which has drawn high praise and tops the download chart on Apple’s iOS App Store.

Elon Musk’s company SpaceXAI has introduced its own agent tool, Grok Bot. Analysts expect others, including OpenAI and Google, to introduce similar services soon. Will Amazon, which has blocked Muse and other third-party agents, introduce a tool as well?

What to watch: If Instinct continues to grow rapidly, could a tech giant hoping to catch up on agentic A.I. make a takeover bid for it?

Leaders at OpenAI, Anthropic, Microsoft and Meta say AI could soon self-improve faster than humans can keep up with

Research leaders at OpenAI, Anthropic, Meta Platforms META -3.70%decrease; red down pointing triangle and Microsoft MSFT -1.53%decrease; red down pointing triangle are asking policymakers to probe the degree to which their companies have automated artificial-intelligence research, joining industrywide calls for greater oversight of the fast-evolving technology.

In a paper published Monday, researchers including OpenAI Chief Scientist Jakub Pachocki, Anthropic co-founder Jack Clark, Microsoft Chief Scientific Officer Eric Horvitz and Meta’s Vice President of AI Research Dawn Song wrote that automating AI research could set off an “intelligence explosion.” Such a development could compress years of progress into months or less and outpace humans’ ability to understand it, the authors said.

Writing in a personal capacity, the paper’s authors said policymakers should urgently demand more visibility into how far companies have already automated their own model development. AI research pioneers including Geoffrey Hinton, who worked at Google for roughly a decade, and Yoshua Bengio are among the co-authors.

The race to develop self-improving AI systems is already under way. Anthropic recently said its AI system Claude is “leading” 26% of the company’s research and development, and is used in some capacities more than 90% of the time. OpenAI has a goal to develop a fully automated AI researcher by 2028, and recently said roughly 70% of its human researchers are using four or more AI agents to assist with their work.

As humans step back, the authors of the new paper wrote, they might lose the chance to catch problems and expertise to solve them.

The authors pointed to a recent incident in which hundreds of OpenAI agents, meant to run cybersecurity tests in a sandbox, got onto the internet without authorization and hacked into Hugging Face. The operation was so large that independent researchers who reviewed the incident under an agreement with OpenAI, said they had to rely on AI to analyze it.

To address concerns raised by the Hugging Face hack, OpenAI said in August that it had paused some training while it added new safety and monitoring measures. Last week, the company said it had paused training on its most capable models again after finding new cases of agent misbehavior.

OpenAI, Anthropic, Meta and Google have acknowledged instances in which models exhibited rogue behavior during testing. Chip giant Nvidia NVDA 2.85%increase; green up pointing triangle on Monday announced new software tools that it said would help companies improve oversight and containment of agents.

At the extreme, the new paper from researchers warned, losing control of AI systems could lead to “the marginalization or extinction of humanity.”

OpenAI, Microsoft and Meta declined to comment. Anthropic didn’t respond to a request for comment.

“Already today, we are at the stage where we need AI systems to monitor what agents are doing. There is no other way to even observe and monitor these agents, humans are already insufficient,” said Song, who serves as co-director of UC Berkeley’s Center for Responsible Decentralized Intelligence in addition to her work at Meta. “Human society is not really positioned for such fast changes and disruptions.”

The paper’s co-authors advised world leaders to negotiate international agreements “to prevent destabilizing development and use of highly capable AI systems.”

This echoes calls from OpenAI and Anthropic leaders to pace the frontier of AI development, in part by establishing international bodies to set AI standards. Some Western nations have worked behind the scenes to create such a body.

In his address to the United Nations last week, President Trump said the U.S. would “totally reject” any “globalist scheme” to control AI.

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