BASF (BAS) M&A Announcement summary

Deal rationale and strategic fit

• Transaction accelerates execution of the "Winning Ways" strategy, unlocking value by creating a leading standalone coatings company with Carlyle as the controlling partner, QIA as co-investor, and BASF retaining a 40% minority stake.

• The coatings business is highly specialized in automotive OEM, refinish, and surface treatment, serving large, loyal markets.

• Partnership with Carlyle leverages their sector experience and carve-out expertise to accelerate growth and value creation.

• The transaction aligns with QIA's strategy of investing in industry leaders and supporting German business resilience.

• Retaining a 40% stake reflects confidence in future value creation and alignment with the partner's business plan.

Financial terms and conditions

• Enterprise value of the transaction is €7.7 billion, with an equity value of about €7 billion, and the entire Coatings division valued at €8.7 billion.

• BASF will receive approximately €5.8 billion in pre-tax cash proceeds at closing, with the 40% equity stake valued at about €1.2 billion.

• Implied 2024 EV/EBITDA multiple is about 13x, reflecting a significant premium to prior valuations.

• Tax leakage is estimated at a mid triple-digit million euro amount.

• Transaction expected to close in Q2 2026, subject to regulatory approvals.

Synergies and expected cost savings

• Carlyle's experience in carve-outs is expected to unlock operational efficiencies and accelerate growth.

• Carlyle plans to invest in commercial capabilities, innovation, and organizational structure to enhance customer focus.