BASF and funds managed by global investment firm Carlyle (Nasdaq: CG), in partnership with Qatar Investment Authority (QIA), have entered into a binding agreement relating to BASF’s automotive OEM coatings, automotive refinish coatings and surface treatment businesses (“BASF Coatings”).

The enterprise value of the transaction amounts to €7.7 billion. Subject to customary regulatory approvals, the transaction is expected to close in Q2 2026. This transaction, together with the already closed divestiture of the decorative paints business, value BASF’s entire Coatings division at an enterprise value of €8.7 billion and an implied 2024 EV/EBITDA multiple before special items of approx. 13x. This represents a significant step in unlocking the value of BASF’s standalone businesses, as the company swiftly executes its Winning Ways strategy. BASF will also reinvest in the coatings business holding a 40% equity stake and will receive pre-tax cash proceeds of approx. €5.8 billion at closing of the transaction.

BASF Coatings is a global player in the development, production and marketing of innovative and sustainable automotive OEM and refinish coatings as well as applied surface treatments for metal, plastic and glass substrates in a wide range of industries. The business operates in Europe, North America, South America and Asia Pacific and generated sales of approx. €3.8 billion in 2024.

Working closely alongside management, Carlyle will support the future growth of the business through investing in its commercial capabilities, innovation pipeline and organizational structure to enhance customer focus. Carlyle will leverage its strong track record and extensive experience in successful carve-outs of industrial and chemical assets, following previous investments in Axalta, Atotech and Nouryon.

“We are delighted to partner with Carlyle, whose sector expertise, carve-out capabilities and collaborative approach will help position BASF Coatings for long-term success,” said Dr. Markus Kamieth, chairman of the board of executive directors of BASF SE. “By retaining an equity stake, we are showing our belief in Coatings’ future value creation and upside potential. The passion, expertise and customer focus of our Coatings team is what makes this business outstanding.”

“The transaction announced today opens a new chapter of opportunity for BASF Coatings, building on today’s success and shaping an even stronger future,” said Anup Kothari, member of the board of executive directors of BASF SE and responsible for the Coatings division.

“BASF Coatings is an exceptional platform with leading technologies, a world-class management team, strong customer partnerships and a truly global footprint,” said Martin Sumner, global head of industrials, and Tanaka Maswoswe, partner at Carlyle. “We see compelling opportunities to leverage our global platform to support the business becoming an established independent leader. This transaction exemplifies Carlyle’s ability to execute complex carve-outs in partnership with leading global corporates.”

“QIA is pleased to partner with Carlyle to support the next phase of BASF Coatings’ continued growth,” said Mohammed Al-Sowaidi, CEO of QIA. “This investment aligns with QIA’s approach of investing in industry leaders and is testament to our belief in the long-term resilience of German businesses.”

Business continuity for customers will be ensured throughout the transaction process. In accordance with legal requirements and local practice, employee representatives will be involved.

Here’s how our coverage built to today’s announcement: In mid-June BASF was reportedly exploring an exit from Coatings amid early interest from financial sponsors. Soon after, the company acknowledged an ongoing strategic review and noted that it had signaled this direction earlier to investors and stakeholders. By late July the process advanced to second-round bids, sharpening focus on valuation and potential buyers. And in early October BASF indicated a decision was near while updating progress toward its 2028 targets.

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