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(Bloomberg) -- BASF SE hired Bank of America Corp. and JPMorgan Chase & Co. to advise it on the potential sale of its coating business, according to people familiar with the matter.
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The process is expected to start toward the end of the second quarter, the people said, and some banks have been eyeing the possibility of providing around €2.5 billion ($2.7 billion) of debt financing for the transaction.
The possible sale of the unit — which makes automobile paints and other industrial coatings — is part of a broader overhaul at the German chemical company, which has shifted the focus to core business lines as it contends with the squeeze from high energy prices and a slump in global demand, particularly in China. The division had sales of about €4.3 billion in 2024.
Last month, BASF agreed to sell its Brazilian paint business to Sherwin-Williams Company for $1.15 billion. It has also hired advisers to prepare for a possible public listing of stock in its agriculture chemicals division.
The coatings business sale could provide a boost to banks that have seen a slowdown in the merger financing business, one of the more lucrative segments of investment banking.
While the auction process hasn’t kicked off yet, one of the people familiar with the matter said the purchase could be financed with leveraged loans and high yield bonds denominated in euros and dollars.
Bank of America and JPMorgan declined to comment. BASF officials didn’t respond to requests for comment.
If it proceeds, the sale would join a spate of divestitures that have helped to bolster European financing activity, including Clayton Dubilier & Rice’s purchase of a stake in Sanofi SA’s consumer-health division and Flutter Entertainment Plc’s acquisition of Playtech Plc’s Italian gambling business.
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