Carlyle to acquire majority of BASF's coatings business

German chemicals major BASF has agreed to sell a 60% stake in its automotive coatings business to the U.S. private equity firm Carlyle Group in a deal valued at around €5.8 billion (US$6.7 billion). Including debt, the transaction values the business at €7.7 billion, the companies announced on Friday.

Under the agreement, Carlyle will carve out the business to form a new stand-alone coatings company, while BASF will retain a 40% shareholding. The move is part of BASF’s ongoing strategy to streamline its portfolio and refocus on core operations amid challenging market conditions in Europe.

Chief Executive Markus Kamieth said the transaction aligns with the company’s plan to concentrate resources on key growth areas, such as agricultural solutions and battery materials.

“BASF’s goal is to jointly develop a stand-alone coatings company with Carlyle, with a view to potentially exit the investment down the line,” Kamieth told analysts. He added that cash proceeds from the deal will help strengthen BASF’s balance sheet and may allow an earlier start to share buybacks, currently scheduled for 2027.

Carlyle, partnering with the Qatar Investment Authority, said it sees strong potential for the automotive coatings business to grow as an independent company. The U.S. group also owns Nouryon, the former specialty chemicals division of Akzo Nobel.

BASF Chief Financial Officer Dirk Elvermann said the company values its retained 40% stake at about €1.2 billion.

The sale marks another major step in BASF’s effort to adapt to headwinds including high energy costs, weak European demand, and increasing competition from China – factors that have weighed on earnings and prompted the company to cut its dividend last year.

Photo: Full Nio ES8 aluminum car body with BASF Oxsilan thin film pretreatment, CathoGuard 800 e-coat, waterborne primer, waterborne basecoat and a two component clear coat. Credit: BASF SE

BASF