BASF to Sell Majority Stake in Coatings Unit to Carlyle for $6.7 Billion — Update

By Adria Calatayud

German chemical company BASF agreed to sell a majority stake in its auto-coatings business to Carlyle Group for about 5.8 billion euros ($6.71 billion), its latest move to slim down its portfolio and retrench to core operations.

U.S. private-equity group Carlyle will carve out the business and establish it as a standalone company, with BASF retaining a 40% stake, the companies said Friday.

BASF has sought to offload noncore businesses in a bid to revive its fortunes. A surge in energy costs that followed the war in Ukraine, Europe's economic malaise and competition from Chinese rivals took a toll on the group's earnings, and led it to slash its dividend last year.

The deal for its auto-coatings unit follows the recently completed sale of its Brazilian decorative-paints business to Sherwin-Williams. BASF also sold its oil-and-gas operations to the U.K.'s Harbour Energy.

BASF had been exploring options for its auto-coatings business for a while as part of a plan to focus on core operations. Chief Executive Markus Kamieth has previously signaled the company would look at options for assets it deems as noncore, betting that a refocused portfolio will aid the company's turnaround efforts.

Last week, the company said it aimed to make its agricultural business ready for an initial public offering in 2027 and that it was exploring collaboration opportunities for its battery-materials division, but put off a potential sale of its environmental catalyst and metal solutions business.

BASF's goal is to jointly develop a standalone coatings company with Carlyle, with a view to potentially exit its investment down the line, Kamieth told analysts during a call on Friday.

Cash proceeds from the deal will be used to strengthen the company's balance sheet and could open the door to an early start to share buybacks, which are currently slated for 2027, BASF Chief Financial Officer Dirk Elvermann said.

Carlyle, which is acting in partnership with Qatar Investment Authority, said it sees compelling opportunities to support the auto-coatings business becoming an established independent company. The private-equity group also owns European chemical company Nouryon, the former special chemicals business of Dutch paints maker Akzo Nobel.

The deal is valued at 7.7 billion euros when including debt, BASF and Carlyle said.

Executives at BASF said they value the 40% stake the company is retaining in the coatings business at 1.2 billion euros.

Write to Adria Calatayud at adria.calatayud@wsj.com

(END) Dow Jones Newswires

October 10, 2025 10:40 ET (14:40 GMT)