BASF Nears €5.8 Billion Coatings Payout as Zhanjiang Deep Dive Puts China Expansion in Focus

European Commission approves €7.7B coatings sale to Carlyle; BASF highlights China's role in Q1 growth amid mixed results.

The German chemicals giant is navigating two defining moments this week. On Monday, the European Commission cleared the sale of its coatings division to Carlyle, unlocking a cash injection that will fuel the company’s broader restructuring. At the same time, BASF rolled out a rare, standalone investor presentation on its Zhanjiang Verbundstandort in China — an asset that has become central to the group’s growth narrative amid a mixed first quarter.

Brussels gave the transaction the green light subject to a single condition: Carlyle must divest Nouryon’s global polysulfide business. Polysulfides are critical precursors for sealants used in aerospace, and the EU watchdog worried that Carlyle, which holds a majority stake in Nouryon, would otherwise dominate that narrow specialty market. For BASF, the ruling removes a key uncertainty. The deal, announced last October, values the coatings unit at an enterprise value of roughly €7.7 billion. BASF will retain a 40% minority stake and expects to pocket around €5.8 billion in pre-tax cash proceeds.

That cash is arriving just as BASF sharpens its capital-allocation strategy. The current €1.5 billion share buyback program is slated to expire at the end of June 2026, and management has pledged total distributions of roughly €12 billion by the end of 2028, the bulk of which will come via dividends. The coatings exit gives the balance sheet more breathing room as the group pivots toward core businesses and cost discipline.

The focus on China, meanwhile, emerged during Monday’s virtual deep dive on Zhanjiang, which featured CEO Markus Kamieth, technology chief Stephan Kothrade, and Haryono Lim, president of mega projects Asia. No fresh financials were released, but the timing was deliberate. BASF’s first-quarter 2026 figures, published earlier this year, showed China as the primary driver of volume growth across nearly all segments — the sole exception being surface technologies. Currency headwinds from the US dollar and the Chinese renminbi, however, weighed on revenue across the board. First-quarter sales came in at €16.02 billion, down from €16.51 billion a year earlier. EBITDA before special items fell to €2.36 billion, while earnings per share rose to €1.06 from €0.91. The company held its full-year guidance for EBITDA before special items at €6.2 billion to €7.0 billion, assuming Brent crude at $65 a barrel and global chemical production growth of 2.4%.

Analysts took note of the progress on both fronts. Goldman Sachs raised its price target on BASF stock to €65 from €63, maintaining a Buy rating. Analyst Georgina Fraser pointed to higher expectations for first-quarter 2026 EBITDA and confidence in the group’s cost-saving measures. Yet the equity market’s reaction was muted. Shares traded at around €50.59 on Monday, up just 0.1%, and remain about 8% below the April high of €55.05. The stock also sits below its 50-day moving average of €52.41. On a year-to-date basis, the shares have gained 13.6%, while the twelve-month return stands at nearly 19%.

With the EU approval in hand, the coatings sale is now on course for completion in the coming weeks. That will free up cash just as the buyback program winds down and the next major investor milestone — second-quarter results on July 29 — approaches. The Zhanjiang deep dive offered a glimpse of how BASF plans to defend its growth story against currency volatility and geopolitical risks. Whether that narrative can push the stock back toward its April peak depends on execution across both the divestiture and the Chinese megaproject.