BASF Strikes €7.7 Billion Deal with Carlyle and QIA for Coatings Unit , Marking Strategic Pivot

German chemical giant BASF SE has entered a binding agreement to sell its automotive coatings and surface treatments businesses to the fund managed by global investment firm Carlyle and the Qatar Investment Authority (QIA).

The transaction, which encompasses BASF's automotive original equipment coatings, automotive refinish coatings, and surface treatment operations-collectively known as BASF Coatings-carries an enterprise value of €7.7 billion. The deal is anticipated to be finalised in the second quarter of 2026, pending customary regulatory approvals.

Overall Division Valued at €8.7 Billion

When combined with the earlier divestiture of its decorative coatings business, the total enterprise value for the entire BASF Coatings division is projected to reach €8.7 billion. This valuation corresponds to an enterprise value multiple of approximately 13 times the division's 2024 EBITDA, excluding special items.

The previous sale of its Brazilian decorative coatings business to The Sherwin-Williams Company was completed on 17 February 2025, for a price of $1.15 billion. That business, which reported 2024 sales of approximately $525 million, was BASF's only significant business-to-consumer (B2C) operation.

This latest transaction is characterised by BASF as a major step in executing its 'Winning with BASF' corporate strategy, designed to unlock value from its portfolio of 'stand-alone businesses'. Upon closing, BASF is set to generate approximately €5.8 billion in pre-tax cash proceeds, while retaining a 40% minority stake in the coatings entity.

The BASF Coatings business is a global developer, producer, and marketer of innovative and sustainable coatings. Its portfolio includes advanced solutions for automotive OEM and refinish markets, as well as surface treatments for metal, plastic, and glass substrates across various industries. In 2024, the operation, which has a presence across Europe, North America, South America, and the Asia-Pacific region, generated sales of approximately €3.8 billion.

BASF's Broader Strategic Restructuring

BASF's Chief Executive Officer, Markus Kamieth, recently outlined the company's ambition to achieve significant profit growth within a three-year timeframe, despite global economic headwinds. The company projects its adjusted profit could rise to between €10 billion and €12 billion, contingent on "moderate to good economic conditions." This compares to an expected EBITDA of €7.3 billion to €7.7 billion for 2025.

The strategic shift includes a comprehensive restructuring of BASF's business architecture, initiated in September 2023, which categorises operations into 'Core' and 'Stand-alone' segments. This follows major cost-saving initiatives launched in 2022.

A series of divestments and operational closures underscore this strategic pivot:

* On September 24, BASF announced its exit from the sodium dithionite business and the closure of its related plant in Ludwigshafen, Germany. The company stated this move is part of its ongoing strategic review of production facilities in Ludwigshafen and reflects its commitment to focusing on business activities with long-term value creation potential.

* On August 26, BASF and Yara International jointly decided to terminate their project to develop a low-carbon ammonia production facility equipped with carbon capture and storage technology in the U.S. Gulf Coast region. BASF cited 'purely economic considerations' as the reason for the withdrawal, stating it would 'focus resources on projects with higher value-added potential'.

* In July, BASF completed the sale of its Styrodur® business to BACHL. Styrodur®, an insulation material made from extruded polystyrene (XPS), finds extensive application in building energy efficiency. This transaction encompassed not only the product line but also brand ownership, marking a significant step in BASF's business restructuring journey.

* In April, BASF completed the sale of its shares, exiting BASF Mechem Chemical (Xinjiang) Co., Ltd. and Mechem Meo Chemical (Xinjiang) Co., Ltd.

* In June 2024, BASF sold its bioenergy enzymes business to the Raman Group; in July, BASF announced the cessation of production of the active ingredient glyphosate at its Knapsack and Frankfurt plants in Germany; in August, BASF decided to halt production related to adipic acid, cyclododecanone, and cyclopentanone at its Ludwigshafen site in Germany; In November, BASF completed the transfer of its flocculant mining business to Solenis. In December, BASF sold its Food & Health Performance Ingredients business (including the Illertissen production site in Germany) to Louis Dreyfus Company (LDC).

* On December 21, 2023, BASF, LetterOne, and Harbour Energy plc signed a business combination agreement to transfer Wintershall Dea's exploration and production operations to Harbour. This included production and development assets and exploration rights in locations such as Norway, Argentina, and Germany. On August 15, 2025, BASF announced the successful completion of this business sale. In exchange, BASF received $1.56 billion in cash out of the total $2.15 billion consideration, along with newly issued Harbour shares, representing a 39.6% stake in the expanded Harbour company.

* In February 2023, BASF announced a major restructuring plan for its Ludwigshafen site: closing the caprolactam plant, one of two ammonia synthesis plants and related by-product facilities, reducing adipic acid capacity, and shutting down cyclohexanol, cyclohexanone, and sodium carbonate plants, along with TDI plants and DNT/TDA precursor facilities.

Concurrently, BASF continues to explore new business opportunities in next-generation humanoid robotics, new energy, advanced materials, and bio-based chemicals.

* On October 7, BASF's Zhanjiang Integrated Site achieved two major milestones: the successful startup of the butyl acrylate plant and the mechanical completion of the ethylene complex and all integrated petrochemical units. These accomplishments signify steady progress toward the site's full operational launch by the end of 2025.

* On September 12, BASF and Zhejiang University Quzhou Research Institute established a strategic innovation partnership to jointly advance sustainable materials and processes. The collaboration will focus on key areas including advanced materials, industrial ecosystems, molecular manufacturing, and bio-based chemicals, with both parties conducting coordinated R&D and innovation in critical technologies, frontier technologies, and related standards.

* On August 18, BASF and Fourier Intelligence signed a memorandum of understanding to jointly develop new material solutions for next-generation humanoid robots, focusing on the application of engineering plastics, polyurethanes, and thermoplastic polyurethanes in robotic structures and components.

* On July 28, BASF Battery Materials and CATL signed a strategic cooperation agreement for cathode materials. Leveraging BASF's global production network, the partners will deepen collaboration in advanced/innovative cathode active materials to achieve resource integration and technological breakthroughs across the global new energy industry chain. In Germany, BASF recently commenced production of 'black powder' sourced from recycled lithium-ion batteries and production waste. The company also partnered with Vulcan Energy to secure fresh resources, with both firms obtaining authorization to conduct seismic exploration for geothermal development projects in Ludwigshafen, Germany.

* On June 6, BASF entered into a four-party strategic cooperation with Guoxuan High-Tech, China Gas Holdings Limited, and BASF Shanshan. This collaboration focuses on R&D for energy storage systems, application of novel battery materials, commercialization of energy storage projects, and green energy solutions. Together, they aim to build a closed-loop ecosystem for the new energy industry chain, driving innovation in energy storage technology and scaling up clean energy applications. 

* On March 7, BASF, the Yangtze River Delta Physics Research Center, and Beijing Weilan New Energy Technology Co., Ltd. signed a cooperation agreement to jointly develop next-generation solid-state battery packs. BASF will contribute expertise and resources for developing non-metallic component materials in the design.

* In March, BASF announced the official commissioning of its expanded polyester and polyurethane resin production lines at its Shanghai Caojing site, doubling its capacity. The company also plans to further expand its electrophoretic emulsion and grinding resin production capacity by early 2026 to strengthen its supply capabilities in the Asia-Pacific automotive coatings sector. 

* In 2024, chemical giant BASF partnered with biotechnology company Acies Bio to further develop a fermentation technology platform for producing fatty alcohols. BASF's Care Chemicals division and Acies Bio will leverage these specialized microorganisms and scale up fermentation processes to produce fatty acids and derivatives used in manufacturing various compounds. Acies Bio has developed a synthetic biology platform designed to convert renewable methanol emissions extracted from captured CO₂ into diverse chemical feedstocks.

Carlyle's Track Record in Chemicals

The Carlyle Group, founded in 1987 and headquartered in Washington, D.C., is a global investment firm with assets under management totalling $465 billion as of 30 June 2025. In recent years, Carlyle has made frequent major investments in the oil and chemical sectors, drawing industry attention.

On June 15, the XRG consortium-comprising Abu Dhabi National Oil Company (ADNOC) and Carlyle-formally submitted a non-binding $18.78 billion acquisition offer for Australian oil and gas producer Santos Ltd. This offer represents a 28% premium over Santos' closing price on June 13, valuing each share at $5.76 (A$8.89), highlighting the fierce competition among energy capital for high-quality resources.

In late 2018, Carlyle Group successfully acquired AkzoNobel's specialty chemicals business for €10.1 billion ($12.6 billion) and renamed it Nouryon.

In October 2016, Carlyle signed an agreement with Total to acquire 100% equity in the latter's chemical subsidiary Ametek.

In 2013, Carlyle acquired DuPont's high-performance coatings business for $4.9 billion, renaming it Axalta Coating Systems. In 2014, Axalta successfully listed on the New York Stock Exchange with a market capitalization of $7.8 billion at the time of listing, representing a 59% increase from the acquisition price. Subsequently, Carlyle Group realized capital through multiple stock sales, completing its full exit by August 2016. The total capital recovered reached $5.8 billion, while the actual investment was only $1.35 billion, yielding a total return exceeding 200%.

Following its investments in Axalta, Atotech, and Nouryon, Carlyle will further leverage its extensive experience and proven track record in industrial and chemical asset spin-off transactions to empower industry-leading enterprises once again.

The entry and exit of industry giants reflect the broader dynamics of the chemical sector and represent the winning strategy for navigating new cycles.