BASF’s €10.3 billion approach for Evonik has been rejected at the first hurdle, but the failed opening bid is already exposing a broader question for Germany’s chemical industry, whether consolidation can compensate for structural cost and competitiveness problems that individual companies cannot solve alone.
BASF offered approximately €22.15 per Evonik share, according to people familiar with the matter cited by the Financial Times and Reuters. Evonik rejected the proposal as insufficient to justify formal negotiations or provide access for due diligence. Reuters reported that Evonik shares had closed at €18.07 on September 25, before the latest market reaction to the approach.
The companies have confirmed that an approach exists, although their descriptions of the process remain limited. Evonik said on September 25 that it had received a nonbinding approach from BASF concerning a voluntary public takeover offer for all of its shares and that no talks were taking place at that point. BASF separately confirmed exploratory discussions with Evonik and RAG Stiftung, saying the course and outcome remained open.
The role of RAG Stiftung makes the ownership structure particularly important. The foundation currently holds approximately 43.8% of Evonik’s issued shares and confirmed that BASF had contacted it regarding a potential voluntary public takeover offer.
That means the valuation question cannot be separated from the strategic position of Evonik itself. The company generated €14.1 billion in sales and €1.87 billion in adjusted EBITDA in 2025, while its 2026 adjusted EBITDA guidance stands between €1.7 billion and €2.0 billion. Sales declined 7% in 2025, reflecting the difficult operating environment across several of its markets.
Evonik is simultaneously undertaking a substantial restructuring of its own portfolio. On September 22, the company announced plans to sharpen its business focus through 2030, including the divestment of its Oxeno and Syneqt businesses and a second phase of its Evonik Tailor Made efficiency program from 2027 through 2029. The company said the restructuring will eliminate 3,200 jobs globally, including around 2,150 in Germany.
That strategy creates a complicated backdrop for any takeover discussion. Evonik is attempting to reduce its cost base, concentrate capital on businesses with clearer growth prospects and strengthen its position in specialty chemicals, while BASF is assessing whether acquiring those assets could accelerate its own portfolio strategy.
BASF is substantially larger by revenue. It generated around €60 billion in sales in 2025 and employed approximately 95,000 people across its businesses. Its stated corporate strategy includes evaluating acquisitions that strengthen core businesses, provide strategic fit and support profitable growth.
Yet scale alone does not resolve the underlying economics of European chemicals.
Cefic’s latest industry data shows that EU chemical capacity utilization stood at about 75% during the second quarter of 2026. Chemical production continued to decline in several major manufacturing countries, including Germany, while the weakest segments included organic basic chemicals and polymers. At the same time, European gas prices remained substantially above US levels, preserving a structural cost disadvantage for energy intensive producers.
The competitiveness problem extends beyond energy. Cefic estimates that Europe accounted for only 13% of global chemical sales in 2025, compared with 46% for China. European chemical output remained around 10% below its 2014 to 2019 pre crisis level, while capacity utilization was 9.5% below that benchmark.
For German producers, the pressure is particularly significant because of the country’s concentration of chemical manufacturing assets. Germany generated approximately €220.4 billion in chemical and pharmaceutical industry turnover in 2025 and accounted for 22% of EU chemical and pharmaceutical production. However, Cefic says production has stagnated at around 80% of its 2021 level amid high energy costs, weak industrial demand and increasing competition from lower cost imports.
Against this backdrop, a BASF and Evonik combination could offer opportunities to rationalize overlapping infrastructure, procurement, research activities and production networks. The potential value, however, would depend on the specific businesses transferred into the combined portfolio and the extent to which operational synergies could offset integration costs and potential asset closures.
That distinction matters because European chemical consolidation is increasingly taking place alongside capacity reduction rather than straightforward expansion. Cefic reported in January that chemical plant closures in Europe had reached a cumulative 37 million tonnes of capacity since 2022, equivalent to around 9% of European production capacity. The organization also reported approximately 20,000 direct job losses associated with those closures.
Evonik’s own recent decisions illustrate the same dynamic. The company announced in September that it would concentrate precipitated silica production in Germany at a new large scale facility in Marl, while its plants in Rheinfelden and Düren are scheduled to close by the end of 2029. The stated rationale includes improving efficiency and competing with lower cost Asian producers.
For BASF, the potential acquisition therefore has two separate strategic dimensions. One concerns the assets and technologies Evonik could contribute to its specialty chemicals portfolio. The other concerns whether combining two large German chemical groups can materially improve their competitive position in an environment where the principal constraints include energy prices, global overcapacity, weak European demand and capital intensity.
BASF is itself reshaping its portfolio. In September, it mandated banks to prepare the planned IPO of its Agricultural Solutions business, targeted for mid 2027. The move indicates that the company is simultaneously pursuing portfolio separation while evaluating potential acquisitions.
The immediate obstacle remains valuation. Evonik’s rejection means BASF would need to improve the economic terms sufficiently to bring the target into formal discussions, assuming it decides to continue pursuing the transaction. The presence of RAG Stiftung as a major shareholder also means that any eventual transaction would have to address the foundation’s position alongside the interests of the wider shareholder base.
