German specialty chemicals group Evonik Industries is preparing to reject BASF's €24-per-share takeover approach, a bid that values the company at roughly €11 billion, according to a Financial Times report. The board has concluded that the offer still undervalues the business, setting the stage for a classic takeover standoff.
The report, citing people familiar with the matter, said Evonik may address the approach publicly in the near future. However, the company is not slamming the door entirely: it could keep talking if BASF raises its price and clearly explains the strategic rationale for a merger. Evonik is also signaling it is comfortable pursuing its own standalone plan, including potential acquisitions of its own, such as an interest in US specialty chemicals group Ashland.
A familiar dance in M&A
This is a textbook example of how takeover negotiations often unfold. The buyer puts a number on the table, and the target's board decides whether that number reflects the company's long-term value. In this case, Evonik's board believes €24 per share does not capture what the business is worth, especially given its position in specialty chemicals—a sector known for high-margin, niche products that can be less cyclical than bulk chemicals.
BASF, one of the world's largest chemical companies, would likely be seeking to expand its own specialty portfolio and achieve cost savings through scale. But Evonik's management appears to be arguing that the offer fails to account for the company's growth prospects and its ability to create value on its own.
The standoff also puts pressure on BASF to show its "deal math" in plain terms: where costs would be cut, where sales would increase, and how quickly those benefits would outweigh the cost of a higher bid. Without a clear and quantifiable synergy story, a richer offer could be seen as overpaying for growth.
What it means for investors
For shareholders, the €24-per-share figure is now the reference point for nearly everyone involved. Analysts will model the potential takeover premium, and merger-arbitrage funds will try to handicap the odds of a higher offer. If BASF walks away, Evonik's shares could quickly lose the extra "takeover pop" that often accompanies a bid, as attention shifts back to the company's standalone earnings power.
If BASF comes back with a higher price, investors will focus less on the headline number and more on the justification. A higher bid typically requires clearly identifiable synergies—otherwise, BASF risks being seen as overpaying for growth that Evonik could deliver on its own.
For everyday investors, this is a reminder that takeover bids are not just about the immediate price. The outcome depends on how confident the target's board is in its own strategy, and how much the buyer is willing to pay to gain control. In this case, Evonik's willingness to walk away—and its interest in making its own acquisitions—suggests it believes its standalone value is higher than what BASF has offered.
The broader chemicals sector has seen a wave of consolidation in recent years, as companies seek scale to cope with rising costs and shifting demand. Specialty chemicals, in particular, have attracted interest because they offer higher margins and more stable earnings than commodity chemicals. This backdrop makes the Evonik-BASF standoff a key story to watch for anyone with exposure to European industrials or the chemicals sector.
Investors will now be watching for Evonik's formal response, any signs of a revised offer from BASF, and whether Evonik moves ahead with its own deal-making. The situation is fluid, and the next few weeks could determine whether this becomes a friendly merger, a hostile bid, or a walk-away that leaves Evonik to chart its own course.
For now, the message from Evonik is clear: €24 per share is not enough. Whether BASF is willing to pay more—and can convince Evonik's board that a tie-up makes strategic sense—remains the central question.
