Evonik Rejects BASF's €10.3 Billion Takeover Approach as Too Low, Sources Say

Evonik Industries has turned down a €10.3 billion (about $11.7 billion) takeover proposal from larger German rival BASF, according to people close to the process cited by the Financial Times and Reuters. The rejection, reported Monday, sets up a tense next phase for a deal that would mark a major consolidation step in Europe's chemical sector, with the final word likely resting on Evonik's largest shareholder, the RAG-Stiftung foundation, per the FT's account.

What BASF Offered, and Why Evonik Said No

BASF's initial proposal was worth approximately €22.15 per Evonik share, according to the Financial Times' reporting carried by Yahoo Finance and corroborated by sources cited in KSL's report. That price implied a premium of nearly 29% to Evonik's share price before takeover speculation went public, and valued the company at an enterprise value of roughly €14.2 billion, per the FT's account.

Despite the premium, Evonik's board rebuffed the approach on valuation grounds. The FT reported that Evonik determined the offer was insufficient to justify entering formal negotiations or granting BASF due diligence access. Notably, no financing concerns or regulatory hurdles were cited as reasons for the rejection in the reporting; it centered on price.

BASF, for its part, has not said publicly whether it intends to raise the offer or step away. In a Monday statement cited by KSL, the company said it was taking a "disciplined approach" and would not comment on price, arguing that its valuation was "based on a potential for synergies that can only be verified if Evonik is involved." BASF separately reiterated that any acquisition would strengthen its core portfolio, per the FT report, but stressed that realizing synergies requires Evonik's active engagement.

The approach itself was confirmed earlier by BASF directly. In a September 25 release, BASF said it was in exploratory talks with RAG-Stiftung and Evonik about a potential takeover, adding that "the course and outcome of these exploratory talks remain open at this stage" and that it would inform the market in line with regulatory requirements if and when required.

RAG-Stiftung's Role Looms Large

Evonik and its largest shareholder, the RAG-Stiftung foundation, both declined to comment on the rejected bid, according to KSL's sourcing. The FT's reporting puts RAG-Stiftung's stake at 44%, describing it as a state-backed entity that holds the position to help fund former coal-mining obligations. The FT report states plainly that the ultimate outcome will likely depend on this foundation.

That dependency carries added complexity because RAG-Stiftung's board includes prominent political and labor figures, according to the FT. Any prospective transaction is expected to face close scrutiny over potential site closures, employment guarantees, and long-term industrial strategy, the report noted, rather than being decided on price alone.

How the Shares Moved

Evonik shares, which closed at €18.07 on Thursday before news of BASF's approach became public, were up 1.6% at €19.80 as of 1450 GMT on Monday, according to KSL. Based on those two reference points, comparing the €19.80 Monday intraday level to the €18.07 Thursday close works out to a gain of roughly 9.6% (calculated as (€19.80 minus €18.07) divided by €18.07) over that stretch, our calculation shows, reflecting the cumulative market reaction to the takeover speculation and confirmed talks rather than a single day's move.

BASF shares, meanwhile, were little changed on Monday after falling 3.6% on Friday, when the company confirmed it was in exploratory talks with Evonik, per KSL's reporting. The FT report separately noted that BASF investors had signaled caution, pushing the stock down nearly 4% late last week amid concerns over execution risk and the financial burden of integrating a complex peer.

Why BASF Is Pursuing Evonik

According to the FT's reporting, a combination would represent a consolidation play by BASF Chief Executive Markus Kamieth, aimed at scaling the company's European operations against aggressive competition from U.S. and Chinese rivals such as Dow and Sinopec. The backdrop, per that reporting, includes elevated energy costs, global overcapacity, and persistent demand weakness across Europe that have pushed industry leaders toward viewing consolidation as a structural necessity.

KSL's reporting adds a competitive dimension: BASF is at risk of losing its position as the world's top chemicals company by revenue to Sinopec. Last year, BASF's group revenue of €59.7 billion was almost identical to that of the Chinese company's chemicals division, according to that report.

The two companies' product lines overlap in parts. Evonik's portfolio includes high-tech plastics, feed additives, and ingredients for coatings and household products, while BASF makes engineering plastics, super absorbent polymers, vitamins, and industrial chemicals, per KSL's description.

Evonik's Own Restructuring Is Already Underway

The rejected bid lands amid a significant internal overhaul at Evonik. Days before BASF confirmed the talks, Evonik on September 22 unveiled a sharpened growth strategy under interim CEO Claus Rettig that includes cutting 3,200 jobs worldwide, around 2,150 of them in Germany, and defining a distinct profile for each of its six major German production sites to guide their future development.

Rettig framed the moves starkly: "The Executive Board, Supervisory Board and employee representatives share one conviction: We are in a structural and economic crisis in our industry," he said, according to the company's own release. Evonik is also proceeding with divestments of large businesses, including its C4 chemicals unit (Oxeno GmbH) and infrastructure unit (Syneqt GmbH), which the company says are progressing as planned.

That restructuring effort followed an earlier upgrade to Evonik's 2026 outlook; the company said in June that its second quarter came in ahead of plan, according to its own press release. Taken together, the rejected bid, the ongoing job cuts, and the raised guidance suggest a board managing a turnaround on its own terms even as it weighs external interest.

Bottom Line

Evonik has rejected BASF's roughly €22.15-per-share, €10.3 billion proposal as too low, according to sources cited by the Financial Times and Reuters, while BASF has said it is taking a "disciplined approach" without indicating publicly whether it will raise its offer or walk away. With neither Evonik nor RAG-Stiftung commenting, the situation remains unresolved. Interpreting the reported facts, any path forward appears likely to hinge less on further share-price movement than on whether BASF is willing to test RAG-Stiftung's valuation threshold, and whether that threshold can be reconciled with the scrutiny the FT says any deal will face over jobs and site commitments.