BASF is reportedly nearing an agreement to sell its coatings division to private equity firm Carlyle for approximately €7 billion, marking one of Germany’s largest corporate transactions of the year. The potential deal underscores a significant realignment within Europe’s chemical sector, a shift driven by structural and economic pressures that are reshaping the industry’s foundations.
This divestment reflects more than a single corporate strategy. It signals a broader transformation across the continent’s industrial landscape. Since the onset of the Ukraine conflict, high energy costs have eroded Europe’s manufacturing advantage. Simultaneously, persistent overcapacity, muted demand, and intensifying competition from Chinese producers have compelled even the most established players to reassess their business portfolios.
Industry-Wide Realignment
The BASF-Carlyle deal follows a growing trend of portfolio streamlining among major chemical producers. LyondellBasell has recently sold four European plants, while ExxonMobil and Sabic are both exploring partial exits from the region. BASF itself has been active in reshaping its portfolio—selling its decorative paints business in Brazil to Sherwin-Williams, considering the sale of its feed enzymes unit, and preparing to list its agrochemicals division by 2027.
Private equity investors, meanwhile, continue to deepen their presence in the sector. Carlyle already owns Nouryon, formerly AkzoNobel’s specialty chemicals business, and appears confident that long-term value remains in areas where traditional industrial players are consolidating.
A Turning Point for Europe’s Industrial Core
The unfolding wave of divestments and acquisitions represents a rebalancing of Europe’s industrial identity—from broad, vertically integrated portfolios toward more specialised, capital-efficient business models. It also reflects a shift from regional dominance to global competitiveness, increasingly under diversified ownership structures that include financial investors.
For Germany, this transformation poses both a challenge and an opportunity. As global cost structures evolve, the country faces the task of redefining industrial leadership—preserving innovation and value creation while adapting to new economic realities.
The key questions now confronting policymakers and industry leaders are clear: How can Europe maintain its competitive edge amid rising global pressures? And how can its industrial base emerge stronger, leaner, and more resilient in the decade ahead?
For more information visit www.basf.com/gb/en
