BASF Set to Announce Agri Chemicals Listing Plan in Overhaul
(Bloomberg) -- BASF SE’s new leader is gearing up to announce a series of overhaul measures later this month, including plans for the future of its agricultural chemicals and coatings businesses, people with knowledge of the matter said.
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Chief Executive Officer Markus Kamieth is poised to tell investors at a Sept. 26-27 Capital Markets Day that the company will prepare the agricultural chemicals division for a potential listing in several years, the people said. BASF may also signal an openness to consider divesting or bringing in partners for portions of its coatings business, according to the people.
BASF could also announce plans for the future development of its battery materials business, the people said. It may use proceeds from any asset sales to strengthen its balance sheet, according to the people, who asked not to be identified because the information is private.
Shares of BASF were up 5.7% at 1:26 p.m. Wednesday in Frankfurt, giving the company a market value of €41.9 billion ($46.6 billion) and putting it on track for the biggest daily gain in nearly two years.
The company’s agricultural chemical segment, which makes crop protection products like herbicides and fungicides, reported about €10 billion in sales last year. The German company said in December it was going to make the operations legally independent by 2026 to give them more freedom. The business could be worth more than €20 billion if valued in line with publicly-traded peers, the people estimated.
The coatings division, part of BASF’s surface technologies segment, reported about €4.4 billion of revenue in 2023. Its offerings include the Chemetall brand of surface treatments used to protect against corrosion, as well as coatings for automotive original equipment manufacturers, Brazil’s popular Suvinil brand of decorative paints and automotive refinish coatings.
Kamieth, a chemist who previously led BASF’s Asian operations, took the reins in April. Europe’s biggest chemicals maker has been taking steps to streamline its business after coming under pressure during the region’s energy crisis.
BASF shares have fallen more than 40% over the past 10 years. It has divested some assets, reaching a deal last year to sell the upstream business of its gas unit Wintershall Dea. The company has paid a stable dividend of about €3 billion per annum over the past few years, and a rise in its investment activities is eroding its balance sheet.
BASF said in July its second-quarter earnings declined, slightly missing analyst forecasts, after prices fell across its chemicals business. The German company in February deepened savings measures at its main Ludwigshafen site as it seeks to trim €1 billion from annual costs by 2026, and BASF has said it plans to continue these efficiency measures.
Deliberations are ongoing and details of the plans could still change, the people said. A representative for BASF declined to comment.
(Updates with share move in third paragraph.)
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