BASF, Carlyle reach $8.9 billion agreement to spin off coatings business

BASF SE and investment firm Carlyle announced October 10 they had agreed to spin off BASF’s coating business as a standalone company, BASF Coatings, covering the chemical company’s automotive OEM and refinish coatings as well as its surface treatment business.

According to a BASF release, Carlyle and the Qatar Investment authority are paying 7.7 billion euros, or $8.9 billion USD, for the Coating business, which is valued at $8.7 billion euros ($10 billion USD). BASF, according to the terms of the deal, will reinvest a 40% equity stake in the spun-off business.

A company release from BASF noted that its coating business had sales of 3.8 billion euros in 2024, or about $4.4 billion USD, from developing, producing, and marketing surface treatments for metal, plastic, and glass in industrial and automotive settings.

In a statement, BASF executive chair Dr. Markus Kamieth said the partnership, and BASF’s retained equity stake, reflect BASF Coatings’ exciting future. “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.”

Martin Sumner, Carlyle’s Global Head of Industrials, said the new company is “an exceptional platform” with good customer partnerships. “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.”

Mohammed Al-Sowaidi, CEO of QIA, said the purchase reflects his firm’s opinion of German industrials. “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,” he said.