BASF SE CEO Markus Kamieth says BASF is “ready to enter into talks” with Evonik Industries AG about their previously announced potential combination but that it will “not pursue a merger at any price.” Kamieth said it owed this “not only to our shareholders but also to our employees.”
In a video posted Oct. 22 on BASF’s website, Kamieth said his company is approaching the proposed combination “with the confidence that, together, we can build something that is stronger than the two companies on their own.”
Kamieth stated in the video that the chemical industry is “consolidating, one way or another. The question is: Do we shape this ourselves? As German companies, with our values, our model of co-determination and our social partnership? Or do we wait until European chemical companies are overtaken in global competition or increasingly acquired by foreign investors?”
A combination of BASF and Evonik would be a “strong German response to global competition,” he said, adding that it was an opportunity for Evonik to “create value for all shareholders.”
BASF confirmed on Sept. 25 that exploratory talks had taken place with RAG-Stiftung and Evonik regarding a potential takeover of Evonik, with Evonik separately confirming the approach. RAG-Stiftung is Evonik’s largest shareholder, with a 44% stake in the company. Later media reports put BASF’s initial bid at €10.3 billion, or €22.15 per share, citing people familiar with the matter. Evonik rejected the bid, the reports said.
Site agreements
In the video, Kamieth said that BASF would take over Evonik’s existing site agreements, ruling out compulsory redundancies until at least 2032. It would also look at which joint activities could be managed from Essen, Evonik’s hometown, adding that it wants to “strengthen North Rhine-Westphalia as a location for research and development.”
Kamieth also said that BASF believes it could continue to operate the existing chemical parks at Marl and Wesseling, contrary to Evonik’s plans to sell Syneqt, the operator of the chemical parks. “The sale currently planned by Evonik will affect approximately 3,500 jobs in North Rhine-Westphalia,” he said.
BASF and Evonik are both strong specialty chemical players with global market access, Kamieth said in the video, adding that BASF’s integrated value chains give it access to key building blocks worldwide.
While Evonik currently has to purchase certain feedstocks, Kamieth said that through BASF, these could be sourced “more cost-effectively, more directly and more reliably from within the company. On top of that come advantages in procurement, infrastructure and research.”
Kamieth said that a combined company would be stronger, preserve jobs in Germany and be “better equipped to compete globally,” adding that a “strong chemical industry in Germany is the right response to global competition.”
Describing the chemical industry as changing faster than ever before, he said that competitors from Asia and the Middle East in particular are becoming “stronger and stronger… our industry has been facing strong headwinds for years. And those headwinds are getting stronger.”
Source: chemweek.com
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