Chemical giant BASF offers to buy Evonik Industries

German chemical concern BASF has offered Evonik Industries, one of the world leaders in the field of specialty chemicals, a merger deal, according to the Financial Times (FT). Evonik confirmed receipt of the offer. Negotiations between the parties have not yet begun, the financial terms of the potential deal have not been disclosed.

According to the FT, BASF also sent the offer to Evonik’s largest shareholder, the RAG fund, which owns 43% of the company. BASF's market capitalization is €45.8 billion, Evonik's is €9.2 billion. Following the announcement of a possible takeover, Evonik shares rose 8%, reaching their highest level in three months. BASF securities fell by 2%.

According to Reuters, the German chemical industry is suffering from rising energy prices and weakening demand. The country's Chemical Industry Association (VCI) expects production to decline by 1.5% this year. In what BASF CEO Marcus Kamit described as the most challenging environment of the past 25 years, BASF is looking to diversify its product portfolio and expand its footprint with smaller competitors. The deal could be the biggest consolidation in the European chemical sector in years.

Ekaterina Naumova