BASF lifts its Evonik offer to €24 a share as Ashland interest surfaces

BASF has raised its takeover offer for Evonik Industries to €24 per share, according to a Reuters report on 23 October that cited two people close to the matter. That would value the Essen-based specialty chemicals group at around €11.18 billion ($12.51 billion), up from an earlier proposal of about €22.15 per share. Bloomberg was first to report that the bid had gone above €11 billion.

How we got here

BASF confirmed on 25 September that it was in exploratory talks about a possible takeover. Reuters' sources say Evonik turned down an earlier €10.3 billion approach as too low. Evonik and its largest shareholder, the RAG Foundation, both declined to comment on the higher figure.

The foundation owns around 43% of Evonik and is open in principle to selling, European Coatings reported earlier this month. It manages money set aside for the long-term costs of Germany's phased-out coal mining, which makes it the audience BASF most needs to win over.

Jobs at the centre of the pitch

BASF has led with job security. On its Evonik page, the company says it would take over Evonik's existing site agreements, keep compulsory redundancies off the table until 2032 and keep Essen and North Rhine-Westphalia as important locations, with at least one Board member based there. It also says it could run the Marl and Wesseling chemical parks itself. Evonik plans to sell its park operator Syneqt, a sale BASF says affects about 3,500 jobs in the state.

CEO Markus Kamieth has also made clear that BASF "will not pursue a merger at any price." Earlier in October, the North Rhine-Westphalia government said a takeover must not put Evonik jobs or its independent development at risk, Reuters reported.

The Ashland twist

A day before news of the higher bid broke, it emerged that Evonik had been looking at buying Ashland, the US specialty chemicals company, which is valued at about $3.3 billion. Reuters' sources say that interest predates BASF's approach, and one person close to the matter said BASF sees an Evonik deal for Ashland as too risky. As PCI Magazine points out, this is reported interest rather than an agreed transaction.

Investors took the news well. Evonik shares closed 2.7% higher at €21.26 on Friday, while BASF rose 0.15%.

Why it matters for materials R&D software

BASF and Evonik are exactly the kind of large, R&D-heavy organisations that informatics, formulation and lab software vendors build enterprise accounts around. Evonik has also invested in the category: Evonik Venture Capital backed Citrine Informatics in 2022. Nothing has been agreed yet, but a combination would bring two big research organisations, and the software each runs, under one roof.