Carlyle nears €7bn deal for BASF unit
Potential sale of coatings business to US investment group would be one of Germany’s largest transactions this year
BASF, the world’s largest chemicals group, is nearing a roughly €7bn deal to sell its coatings business to the US investment group Carlyle in one of Germany’s largest transactions this year.
Carlyle topped other private capital groups in an auction for the business unit and is now in exclusive talks with BASF, according to people familiar with the matter. The people cautioned that a deal had not been finalised.
A sale of the division would provide new funds for BASF, which has faced its worst crisis in years due to sharp increases in energy prices since Russia invaded Ukraine.
Last year the company slashed its dividend by a third. BASF stock has traded roughly flat this year but remains down significantly since the start of the war.
The BASF coatings business counts Germany’s struggling carmakers among its most important clients. The unit has more than 10,300 employees and generates €3.8bn in annual sales, according to its website.
European chemicals businesses have broadly struggled and are in a prolonged industry downturn, due to overcapacity, weaker than expected demand, and tough competition from Chinese rivals.
Groups including ExxonMobil and Saudi Arabia’s Sabic are considering exiting some of their European chemical operations, while earlier this year LyondellBasell sold four European plants.
Ludwigshafen-based BASF had been running an auction process for the coatings unit that drew interest from other private equity groups including KPS Capital Partners.
BASF last week closed the sale of its decorative paints unit in Brazil to Sherwin Williams for $1.15bn and said it was also eyeing up the sale of its feed enzymes business.
BASF also confirmed its intention to part with a minority stake in its agrochemicals division, as it continues to spin off or sell industry-specific business areas. The company said it aimed to have the agrichemicals division ready to be listed in 2027.
Carlyle has invested in other assets, notably acquiring the chemicals division of Dutch conglomerate AkzoNobel for €10.1bn in what remains Carlyle’s biggest European deal.
It has since renamed that business Nouryon and spun out salt and chemicals producer Nobian as a separate business in 2021.
BASF and Carlyle declined to comment.