BASF is to sell a majority stake in its coatings business to investment firm Carlyle and the Qatar Investment Authority (QIA) in deal that values the unit at €7.7 billion.
As part of the deal BASF will hold onto a 40% equity stake and will receive €5.8 billion when the deal closes in the second quarter of next year.
BASF CEO Markus Kamieth said: “By retaining an equity stake, we are showing our belief in Coatings’ future value creation and upside potential.”
The coatings business of BASF, one of the world’s largest chemicals companies, is focused on automotive, including the collision repair aftermarket. In surface treatment it also serves the aerospace industry and various additional industrial applications. “These are large markets with high customer loyalty,” said Kamieth.
In 2024, BASF Coatings – excluding the decorative paints business BASF has already divested – generated sales of €3.8 billion. Around €1 billion came from surface treatment under the Chemetall brand; around €2 billion in automotive OEM coatings and around €800 million in automotive refinish coatings from the Glasurit, R-M and other brands.
Kamieth (pictured above) said the 40% holding “is a testament to our confidence in the business” and when asked about the future noted that with an investment fund or a private equity company there is usually an exit at some point. “Our hypothesis going in is that we will also jointly be working on this exit at some point. But other than that, everything else is speculation right now,” he said.
BASF said that Carlyle will support the future growth of the business through investing in its commercial capabilities, innovation pipeline, and organisational structure and pointed to Carlyle’s experience of carve-outs of industrial and chemical assets, following previous investments in Axalta, Atotech, and Nouryon.
“QIA is pleased to partner with Carlyle to support the next phase of BASF Coatings’ continued growth,” said Mohammed Al-Sowaidi, CEO of QIA.
At its capital markets day in September 2024 BASF announced its plans to explore options for the coatings business, which at the time included a full sale as well as retaining a minority stake. BASF said at the time it was shifting to focus on core businesses including chemicals, materials, industrial solutions and nutrition and care, based on their integration into BASF’s value chains and the Production Verbund at major sites.
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