BASF Shareholders Set to Approve Agribusiness Spin-Off as Coatings Sale Nears Completion

BASF shareholders vote on historic Agricultural Solutions spin-off as €7.7B coatings sale to Carlyle/QIA funds €4B buyback; Q1 net profit rises 15% to €927M.

The Ludwigshafen-based chemicals giant is racing through a sweeping restructuring that will reshape its corporate structure for decades to come. Shareholders gathering for today's annual general meeting face a pivotal vote on the separation of the Agricultural Solutions division, while the company simultaneously prepares to pocket a massive windfall from the sale of its coatings business.

The proposed spin-off of the crop protection and seeds unit represents the most significant structural shift in BASF's modern history. If approved, the division will begin operating as a legally independent subsidiary from May 2026, with BASF SE retaining full ownership until an initial public offering slated for Frankfurt in 2027. Livio Tedeschi, who has overseen the agricultural business for the past four years, will lead the new entity through its transition to standalone status.

The timing of the vote coincides with another landmark transaction. BASF's agreement to sell its Coatings division to a consortium comprising Carlyle and the Qatar Investment Authority values the business at €7.7 billion — well above its previous book value. The company will retain a 40 percent stake in the unit, while the deal is expected to generate roughly €5.8 billion in pre-tax cash proceeds during the second quarter.

That capital injection will help finance the broader corporate overhaul, which includes an aggressive share buyback programme. Management has already been active in the market, purchasing a substantial volume of its own stock through mid-March as part of a €1.5 billion tranche. The broader plan targets €4 billion in total repurchases by the end of 2028. Cost-cutting efforts have also been intensified, with group-wide savings targets now raised to €2.3 billion.

The restructuring momentum has not been lost on equity markets. BASF shares touched a three-year high of €54.51 on Tuesday, and have gained 22 percent since the start of the year. The stock was trading at €54.05 ahead of the AGM, just shy of its 2026 peak.

The strategic progress comes against a challenging operational backdrop. Currency headwinds took a significant toll in the first quarter, with a strong US dollar and a weak Chinese yuan combining to pressure revenues. The coatings sale alone is expected to cost BASF up to €200 million in operating earnings for the period due to exchange rate effects. High European energy costs and US tariffs added further strain.

Despite these pressures, the company delivered a notable earnings surprise. Net profit climbed to €927 million in the first three months, a gain of nearly 15 percent year-on-year. Earnings per share reached €1.06. The improvement was achieved even as sales prices declined across most segments amid industry-wide competitive pressure, and despite €170 million in special charges tied to ongoing efficiency measures.

The bottom-line resilience reflects the effectiveness of BASF's cost discipline programme, which is outperforming internal targets. Management has maintained its full-year guidance, targeting operating earnings between €6.2 billion and €7.0 billion for 2026 — a wide range that underscores the uncertainty surrounding currency movements.

Shareholders also stand to benefit from the company's capital distribution policy. The proposed dividend stands at €2.25 per share, with payments scheduled for May 6 if the AGM gives its blessing. The payout is complemented by the ongoing buyback programme, which forms part of a broader strategy to return capital to investors as the group transitions from an integrated chemicals giant into a holding structure with independently operating subsidiaries.