BASF Receives EU Green Light for Coatings Sale, Appoints New Automotive Refinish Chief

EU clears BASF's €7.7bn coatings sale to Carlyle with condition to sell polysulfide unit, preventing aerospace sealant monopoly. BASF retains 40% stake, funds climate-neutral shift.

BASF’s transformative divestiture of its coatings business has cleared its most significant regulatory hurdle, with the European Commission approving the €7.7bn sale to private equity firm Carlyle. But the deal comes with a condition that forces Carlyle to offload Nouryon’s global polysulfide operations — a move designed to prevent a monopoly in the specialised sealants used by the aerospace industry. Carlyle already holds interests in other players in that niche sector, and the mandated disposal addresses the EU’s competition concerns.

The transaction is set to deliver a gross cash inflow of roughly €5.9bn to BASF, though Ludwigshafen will not sever all ties with the business. The German chemical giant is retaining a 40% stake in the new coatings entity, with Carlyle bringing in the Qatar Investment Authority as a co-investor. The freed-up capital will be channelled directly into the company’s broader restructuring push, which includes a costly shift toward climate-neutral production — particularly at its sprawling flagship site in Ludwigshafen.

Separately, BASF announced a leadership handover in one of the coatings division’s key units. Steve Arndt will take over as Senior Vice President for Global Automotive Refinish Coatings on 1 July 2026, replacing Chris Titmarsh, who is retiring after two decades with the group. Arndt comes with deep distribution expertise: he was Global Distribution Sales Director at Axalta Coating Systems, overseeing sales across more than 140 countries, and previously served as President and Chief Operating Officer of FinishMaster, which BASF describes as North America’s leading independent automotive refinish distributor. The appointment signals the importance of channel relationships and workshop networks in a business that generates roughly €3.7bn in annual sales.

The leadership change coincides with an uneven start to the year for BASF’s top line. First-quarter group revenue slipped to €16.0bn from €16.5bn a year earlier, while EBITDA before special items came in at €2.36bn. Within the Surface Technologies segment, which houses the coatings operations, the picture was mixed: higher precious metal prices pushed revenues up, but volumes declined. Segment EBITDA nevertheless improved year-on-year.

For the full year, BASF continues to target EBITDA before special items of between €6.2bn and €7.0bn, and free cash flow in a range of €1.5bn to €2.3bn. Management, however, flagged persistent uncertainty around energy and raw material costs as well as potential supply-chain disruptions.

The stock market took the EU approval and the executive shuffle largely in stride. BASF shares closed at €50.44 on the latest trading day, marginally below their 50-day moving average and roughly 8% off the April high of €55.05. On a year-to-date basis, the stock still shows a gain of nearly 20%, though the recent consolidation suggests investors are waiting for clearer evidence that the restructuring roadmap is translating into sustainable margin improvement.

Completion of the coatings sale now hinges only on formalities — namely, Carlyle finalising the required polysulfide divestiture. Once that box is ticked, the cash will flow to Ludwigshafen, giving BASF the financial breathing room it needs to fund its transformation while the retained minority stake ensures it continues to collect a share of the coatings business’s future earnings.