BASF’s Balancing Act: Coatings Divestiture Clears EU Hurdle as CoreShift Cost Cuts Target 20% Reduction

European Commission greenlights BASF’s €7.7B coatings sale to Carlyle, requiring Nouryon polysulfide divestiture; BASF retains 40% stake and launches CoreShift cost-cutting program.

The European Commission has given the green light to BASF’s sale of a majority stake in its coatings business to Carlyle — but with a condition that forces the private equity firm to offload Nouryon’s global polysulfide operation first. The move, aimed at preserving competition in aerospace sealant materials, leaves BASF’s broader disposal strategy on track. The coatings unit was valued at roughly €7.7 billion including debt, and the German chemical giant will retain a 40% stake in the newly formed entity.

That portfolio lightening comes as BASF simultaneously deepens an internal cost offensive. Under the banner of “CoreShift,” management has pledged to cut cash-effective fixed costs by up to 20% by 2029. The programme is being coordinated by a new Core Transformation Office led by Julia Raquet, with CEO Markus Kamieth describing it as one of the largest optimisation efforts in the company’s history. The overhaul will inevitably mean fewer jobs, though concrete numbers have not yet been disclosed; talks with employee representatives are expected to follow.

The twin pressures of portfolio pruning and operational restructuring are happening against a backdrop of steady capital return. BASF’s share buyback programme — set at up to €1.5 billion and due to conclude at the end of June 2026 — continued apace in late May, with 950,000 shares purchased between the 25th and 29th. The total since the programme’s launch in November 2025 has reached 27.8 million shares, all slated for cancellation. The repurchases provide a mechanical lift to earnings per share but do not substitute for an operational recovery.

That recovery remains elusive, particularly at BASF’s Ludwigshafen headquarters, which has posted losses for four consecutive years and shed around 2,800 positions since early 2024. The site is also the focus of a decarbonisation effort: a 95-tonne plate falling-film evaporator arrived on 8 April 2026 as part of a new heat-pump system at the Steamcracker II, developed with Piller Blowers & Compressors and GIG Karasek, to generate CO?-free steam. The project addresses both climate targets and the site’s acute energy cost burden.

Industry-wide, the outlook is subdued. Germany’s chemical association VCI describes the start of 2026 as weak, pointing to bureaucracy, high energy prices, global turbulence and uncertainty from the Middle East conflict. No reliable full-year forecast has been issued. BASF, however, maintains its own projection: EBITDA before special items between €6.2 billion and €7.0 billion for the year, with free cash flow in the €1.5 billion-to-€2.3 billion range. In the first quarter, EBITDA before special items came in at €2.4 billion, down slightly from €2.5 billion a year earlier, while earnings per share rose from €0.91 to €1.06, aided by solid volume growth — especially from China — that offset currency and pricing headwinds.

The stock’s reaction to the latest news has been muted. On Wednesday, BASF shares traded at €50.58, a 0.75% decline, and the 30-day performance shows a 4% loss. Yet the year-to-date picture remains positive: a 13.05% gain, and over twelve months the advance reaches 20.70%. Technically, the share price sits below its 50-day moving average of €52.20 but above the long-term average, reflecting a market that is still weighing the mix of cost cuts, divestiture proceeds and buyback support.

Two key dates lie ahead. On 8 June 2026, BASF will host a virtual deep dive on its new integrated Verbund site in Zhanjiang, China, offering a closer look at how its largest investment bet is progressing. And in July, the second-quarter report will land shortly after the buyback programme ends — a moment that will test whether operational momentum can take over from capital return as the main driver of shareholder value.