BASF Sheds Coatings for €7.7bn as CoreShift Program Targets One-Fifth Fixed-Cost Reduction

BASF sells coatings for €7.7bn, launches CoreShift to cut fixed costs 20% by 2029, plans agchem IPO in 2027, and reduces headcount.

The transformation of BASF is entering its most intensive phase yet. After months of speculation, the chemical giant is on the verge of completing the sale of its coatings division to a consortium led by Carlyle and the Qatar Investment Authority—a deal that values the business at €7.7bn and will funnel roughly €5.8bn (pre-tax) into the group’s coffers. At the same time, chief executive Markus Kamieth has launched “CoreShift”, an efficiency drive that aims to cut fixed costs in the company’s core industrial operations by a fifth by 2029.

The €5.8bn from the coatings transaction, expected to close in the current quarter, will be deployed primarily to pay down debt and fund the restructuring of BASF’s sprawling Verbund sites. Investors also see it as a lifeline for the dividend, which had come under scrutiny amid heavy capital expenditure and weaker demand. Meanwhile, the group continues to prepare its agricultural chemicals division for a separate future. Since 1 May, Livio Tedeschi has led the crop-solutions unit as a legally independent European entity, clearing the path for a planned initial public offering in Frankfurt in 2027. BASF intends to retain a majority stake in the business, which generated roughly €9.8bn in sales during its last full year. Management wants to lift the seed share of that revenue to a quarter and expand the Asian footprint.

The CoreShift programme focuses on the Chemicals and Materials segments, which together account for about €40bn in annual sales. Julia Raquet has been appointed to oversee the simplification of processes and the harmonisation of IT systems across these divisions. Headcount is already shrinking: worldwide employment stood at just over 106,000 in the first quarter, down 5,000 year-on-year. Ludwigshafen, BASF’s historic home base, is bearing the brunt. Since the start of 2024, 2,800 positions have been eliminated there, and further cuts are planned despite a site-level agreement that technically rules out compulsory redundancies until the end of 2028. Capacity utilisation in Ludwigshafen remains weak, adding pressure on management to find new ways to reduce the local cost base.

Portfolio pruning is continuing in parallel. BASF has agreed to sell its silicate business to US-based PQ Corp, with the transaction expected to close in the second half of 2026. Financial terms were not disclosed. On the financial front, the cost discipline is already showing up in the numbers. Although first-quarter sales slipped to just over €16bn, earnings per share climbed to €1.06. A substantial share buyback programme is also supporting the stock: since November 2025, BASF has repurchased more than 25 million of its own shares.

The market has rewarded the strategic shift, pushing the stock up by roughly a fifth this year. On a weekly basis, however, the shares have given back some ground, easing 4% to €51.11 and settling exactly on the 50-day moving average. The 14-day relative strength index stands at 84.5, a clear signal that the equity is technically overbought in the short term. DZ Bank recently lifted its price target to €63, with analyst Peter Spengler citing a strong start to the year and the company’s renewed focus on shareholder returns.

All eyes now turn to 29 July, when BASF will report its second-quarter results. The market will be looking for further evidence that margins are improving and that the efficiency drive is translating into sustainable profit growth. The proceeds from the coatings sale and the progress of the agri IPO will also feature prominently in the coming months as Kamieth reshapes BASF into a leaner, more focused player.