BASF has made a takeover approach to German chemicals rival Evonik in a move that could reshape the European chemicals industry. The proposal, which was recently presented to Evonik and its largest shareholder, the RAG-Stiftung foundation, aims to broaden BASF’s geographic reach and product portfolio while addressing challenges facing the sector.

Evonik, based in Essen, has a market capitalization of approximately €8.4 billion, with an enterprise value of about €12 billion when accounting for net debt. BASF, headquartered in Ludwigshafen, has a significantly larger market value of around €45 billion and has engaged with financial institutions as part of its efforts to advance the potential transaction. Despite these developments, sources familiar with the discussions emphasized that there is no certainty a deal will be finalized.

Both Evonik and RAG-Stiftung have confirmed receiving a nonbinding takeover offer from BASF but stated that no active negotiations were taking place at this time. BASF described the communications as “exploratory talks,” underscoring that the outcome of these discussions remains uncertain.

For a deal to progress, Evonik’s shareholders and management would need to be convinced of the strategic benefits and offered an attractive premium. The role of RAG-Stiftung, which holds a 44 percent stake in Evonik, is particularly pivotal in determining whether an agreement could be reached.

Following news of the approach, Evonik’s shares surged as much as 10.6 percent in trading before closing 7.2 percent higher, while BASF’s shares fell 3.6 percent. Market analysts have highlighted the potential for the combined company to create a stronger Germany-based chemical leader, positioned to compete more effectively with major Chinese and American players, while preserving German ownership.

However, some analysts have expressed reservations. One pointed to possible strategic conflicts, noting that BASF has recently emphasized simplifying its portfolio, raising questions about how acquiring Evonik would align with this approach. Others noted the complementary nature of the two firms’ product lines and the potential to enhance BASF’s foothold in specialty chemicals.

Any merger would likely face regulatory review by the European Commission, but Brussels has signaled support for the creation of larger, more competitive European industrial champions. The deal would contrast with recent foreign acquisitions of German chemical assets, such as the 2025 purchase of Covestro by the Abu Dhabi National Oil Company for over €14 billion.

BASF’s chief executive Markus Kamieth would be taking a significant step toward consolidation in a fragmented industry if the takeover proceeds, signaling a possible shift in the European chemicals landscape. However, as talks remain preliminary, stakeholders will be closely watching future developments.