BASF (a leading chemical company) has announced a partnership with Carlyle (a global investment firm) and the Qatar Investment Authority (QIA) to enter into a binding agreement concerning BASF’s automotive original equipment manufacturer (OEM) coatings, automotive refinish coatings, and surface treatment businesses. This collective arrangement will form a new entity known as “BASF Coatings.”
The enterprise value associated with this transaction is set at €7.7 billion. The agreement is contingent upon receiving the necessary regulatory approvals. If all goes according to plan, the deal is anticipated to close in the second quarter of 2026. This significant move, combined with the recent divestiture of BASF’s decorative paints business, values the entirety of BASF’s Coatings division at an impressive €8.7 billion. Notably, this valuation translates to an implied EV/EBITDA multiple of around 13x for the year 2024, before accounting for any special items. This strategic step aligns with BASF’s ongoing initiative to maximize the value of its standalone businesses through its Winning Ways strategy.
As part of this transaction, BASF will maintain a 40% equity stake in the coatings business, allowing it to retain a significant interest in its future growth and direction. After this deal is completed, BASF is expected to receive pre-tax cash proceeds of approximately €5.8 billion, which will further enhance its financial flexibility.
BASF Coatings stands as a global leader in the production and marketing of innovative and sustainable coatings for both automotive OEMs and refinish applications. The company also specializes in surface treatment solutions for materials such as metal, plastic, and glass across a broad range of industries. With operational footprints in Europe, North America, South America, and Asia Pacific, BASF Coatings generated sales of around €3.8 billion in 2024, highlighting its substantial market presence and effectiveness.
Carlyle will play a crucial role in supporting the growth of BASF Coatings after the transaction is completed. By collaborating closely with the management team, Carlyle plans to invest in various aspects of the business, including enhancing its commercial capabilities, innovation pipeline, and organizational structure. These efforts are aimed at improving customer focus, ultimately driving the industry forward.
Carlyle’s track record in successfully managing carve-outs of industrial and chemical assets, exemplified by previous investments in companies like Axalta, Atotech, and Nouryon, positions it well to contribute effectively to BASF Coatings’ success.
Throughout the transaction process, maintaining business continuity for customers will be of utmost importance. BASF has committed to ensuring that client relationships remain stable and intact. In line with legal requirements and local practices, employee representatives will also be engaged in discussions to ensure that their interests and concerns are adequately addressed during this transition.
KEY QUOTES:
“We are delighted to partner with Carlyle, whose sector expertise, carve-out capabilities and collaborative approach will help position BASF Coatings for long-term success. By retaining an equity stake, we are showing our belief in Coatings’ future value creation and upside potential. The passion, expertise, and customer focus of our Coatings team is what makes this business outstanding.”
Dr. Markus Kamieth, Chairman of the Board of Executive Directors of BASF SE
“The transaction announced today opens a new chapter of opportunity for BASF Coatings, building on today’s success and shaping an even stronger future.”
Anup Kothari, member of the Board of Executive Directors of BASF SE and responsible for the Coatings division
“BASF Coatings is an exceptional platform with leading technologies, a world-class management team, strong customer partnerships, and a truly global footprint. We see compelling opportunities to leverage our global platform to support the business becoming an established independent leader. This transaction exemplifies Carlyle’s ability to execute complex carve-outs in partnership with leading global corporates.”
Martin Sumner, Global Head of Industrials, and Tanaka Maswoswe, Partner at Carlyle
“QIA is pleased to partner with Carlyle to support the next phase of BASF Coatings’ continued growth. This investment aligns with QIA’s approach of investing in industry leaders and is testament to our belief in the long-term resilience of German businesses.”
Mohammed Al-Sowaidi, CEO of QIA
