BASF Fires Up Three Mega-Plants as Investors Weigh a Historic Break-Up

BASF commissions new aroma plants in Germany and China, eyes €5.8B cash from coatings sale, as shareholders vote on ag spin-off amid currency headwinds.

The chemical giant is sending mixed signals to the market. On one hand, BASF has just commissioned three world-scale production facilities in a clear vote of confidence in its core operations. On the other, it is pushing ahead with a sweeping divestiture programme that will fundamentally reshape the company.

The new plants, located in Ludwigshafen and the Chinese hub of Zhanjiang, are already producing aroma ingredients commercially. The German site is now churning out menthol and linalool, backed by a three-digit million-euro investment that has created 60 jobs. Over in China, a separate facility is supplying the key raw material citral, effectively stitching together a transcontinental supply chain for the flavours and fragrances division.

The timing of these announcements is no accident. Tomorrow, April 30, is shaping up as a pivotal day for the stock. Management will release first-quarter earnings before the market opens, followed by the annual general meeting in Mannheim. Shareholders there will vote on the proposed spin-off of the agricultural solutions division into a standalone subsidiary, paving the way for a minority IPO by 2027. A dividend of €2.25 per share is also on the table.

Currency Headwinds Meet a Cash Windfall

The quarterly numbers are expected to show a clear drag from foreign exchange. A weak US dollar is forecast to slice roughly nine percent off revenue, while operating profit could take a hit of up to €200 million. Despite that currency squeeze, analysts still expect earnings per share to climb to an average of €1.08.

The real financial firepower, however, lies in the coatings disposal. BASF has agreed to sell a majority stake in its paints business to private equity firm Carlyle and the Qatar Investment Authority, a deal that values the unit at €7.7 billion — more than double its last book value. The transaction is expected to inject roughly €5.8 billion in cash into Ludwigshafen once completed, with BASF retaining a 40 percent holding. European antitrust regulators are currently reviewing the deal, with a provisional deadline of May 18.

Market Sentiment Holds Firm

Investors have already priced in much of the restructuring optimism. The stock has rallied nearly 21 percent since the start of the year, closing Wednesday at €54.05, just shy of its 52-week high. Technical indicators suggest the shares may be oversold, with the RSI reading at 22.6.

Whether that valuation can hold will depend heavily on what the board reveals at 7:00 AM on Thursday, when the books for the first quarter are opened. With a historic break-up vote, a multi-billion-euro deal under regulatory scrutiny, and a currency squeeze all converging at once, BASF’s management has a lot to prove.