BASF Faces a Summer of Two Fronts: Agricultural Spin-Off Nears Key Legal Step as CoreShift Cost Cuts Begin

BASF's Agricultural Solutions IPO moves closer with July registration; CoreShift restructuring aims to slash fixed costs by 20% by 2029 as chemical industry faces headwinds.

The chemicals giant is entering a pivotal stretch with two major corporate events converging. Within weeks, BASF expects the commercial register entry for the carve-out of its Agricultural Solutions unit — a concrete milestone on the path to an initial public offering by mid-2027 — while simultaneously rolling out its "CoreShift" restructuring programme, one of the most ambitious cost-cutting drives in the company's history.

Agribusiness IPO Takes a Step Closer to Reality

The handelsregistereintragung — the formal registration of the newly independent subsidiary — is slated for early July, following shareholder approval at the annual general meeting in April. The hive-down contract between BASF SE and BASF Agricultural Solutions Deutschland GmbH was notarised in March 2026. Roughly 2,500 employees at the Ludwigshafen and Limburgerhof sites will transfer to the newly established legal entity, retroactively effective from 1 January 2026. Agricultural Solutions will be incorporated as a European stock corporation (SE) and is expected to list on the Frankfurt Stock Exchange, with BASF retaining a majority stake.

The operational separation is running in parallel with the introduction of a new ERP system. North America has already completed the transition, while other regions are scheduled to finish by early 2027. The first quarter showed how external headwinds — currency effects and the fallout from the Middle East conflict — weighed on the agribusiness's results, even though sales volumes held up. Management nonetheless considers the division "on track."

Industry Headwinds: No Sign of Recovery

The broader chemical sector continues to struggle. According to the German chemical industry association VCI, chemical and pharmaceutical production in the first quarter of 2026 fell by 6% year-on-year, while sales shrank by 5.4%. Capacity utilisation edged up slightly to 75.1% — still well below a profitable level. Wolfgang Große Entrup, VCI's managing director, attributed modest growth in some segments to "geopolitical hoarding" and stressed: "We see no trace of an upturn."

BASF itself feels the pressure. High energy costs, weaker industrial demand and US tariffs disrupting global trade flows are weighing on the business structurally. The group's first-quarter revenue came in at €16.0 billion, down 3% from the prior year, with EBITDA before special items of €2.4 billion. For the full year, management maintains its forecast of EBITDA before special items between €6.2 billion and €7.0 billion.

CoreShift: A New Operating System for the Group

Against this backdrop, CEO Markus Kamieth has launched CoreShift — what he calls "one of the largest optimisation programmes for BASF" — aimed at fundamentally overhauling the company's core operations. The goal is to reduce cash-relevant fixed costs in its four core divisions (Chemicals, Materials, Industrial Solutions and Nutrition & Care) by up to a fifth by 2029 compared with 2024. Together, these divisions generate roughly €40 billion in sales.

Kamieth declined to specify how many jobs will be cut, saying talks with works councils are pending. At the Ludwigshafen headquarters, around 2,800 positions have already been eliminated since the start of 2024, and the site is expected to undergo further changes as CoreShift progresses. According to Handelsblatt, some roles from the Berlin office are also being relocated to India. The restructuring is being led by Julia Raquet, formerly head of Europe, who now runs a newly created transformation office reporting directly to Kamieth. The key levers include leaner processes, harmonised IT systems and greater use of artificial intelligence.

Cost Savings Already Beating Targets

On the cost front, BASF is outperforming its original goals. By the end of 2025, the group had achieved an annual cost reduction rate of roughly €1.7 billion — €100 million above the initial target. The company has now raised its full-year 2026 savings target to €2.3 billion, up from the earlier €2.1 billion.

Meanwhile, the share buyback programme has run its course. BASF repurchased a further 950,000 of its own shares at the end of May, bringing the total since the programme's launch to nearly 28 million shares. The stock traded recently at €50.56, about 8% below its 52-week high of €55.05, though it has gained around 20% on a year-to-date basis.

Analyst views remain divided. Deutsche Bank's Virginie Boucher-Ferte rates the stock a Buy with a €60 price target, while Goldman Sachs's Georgina Fraser recently raised her target to €65, also a Buy. JP Morgan's Chetan Udeshi, however, sticks with an Underweight call and a €40 target.

What to Watch Next

The commercial register entry in July will be the first major test of whether the agribusiness IPO timetable holds. BASF is scheduled to publish its second-quarter and half-year results on 30 July, which will also provide the first tangible evidence of whether CoreShift is delivering on its promises. For now, the group is juggling two massive transformations at once — and the market is watching closely.