Coatings Cash, CoreShift Cuts: BASF Maps Out a Two-Pronged Strategy as Buyback Expires

BASF's share buyback ends in June, pushing the chemicals giant to rely on CoreShift cost cuts and a €2-3bn coatings sale to Carlyle to support its stock price and meet 2026 EBITDA targets.

The clock is ticking on BASF’s current share buyback programme, which runs out at the end of June, and the chemicals giant is now racing to put its operational house in order before the artificial support from stock repurchases disappears. Without the steady absorption of its own equity, the company’s share price will need to rely far more heavily on underlying earnings power — and management is betting that a fresh wave of cost-cutting and the imminent sale of its coatings business will fill the void.

At the heart of the push is the “CoreShift” transformation programme, led by executive Julia Raquet. The plan targets a 20% reduction in cash fixed costs across the core business by 2029, achieved through global standardisation of IT systems and a greater reliance on artificial intelligence. CEO Markus Kamieth has also flagged further headcount reductions, though talks with labour representatives are still in their early stages and specific job-cut targets have not yet been disclosed. Alongside these internal measures, BASF is divesting peripheral assets: its silicates business centred on the Düsseldorf site is being sold to US-based PQ, a transaction expected to close in the second half of 2026. Financial terms remain confidential.

Meanwhile, the sale of BASF’s coatings operation to private equity firm Carlyle Group is taking concrete shape. The European Commission has granted antitrust clearance, and the transaction remains on track for completion by 2026. Proceeds from the deal are earmarked for BASF’s ongoing buyback programme — the same one that is about to expire for now. The company has already repurchased 27.8 million of its own shares. To ensure smooth management of the coatings division during the transition, BASF has appointed Steve Arndt, a former executive at rival Axalta, as the new Senior Vice President for global automotive refinish coatings, succeeding Chris Titmarsh.

All of this is unfolding against a backdrop of persistent headwinds for the European chemical industry. The Verband der Chemischen Industrie (VCI) has complained about soaring energy costs and stifling bureaucracy, and it projects a slight output decline in pure chemical production this year. Despite the pressure, BASF is sticking to its full-year guidance: it continues to target EBITDA of between €6.2 billion and €7.0 billion for 2026, with free cash flow expected in a range of €1.5 billion to €2.3 billion. Whether the first fruits of CoreShift will be visible in the second-quarter numbers is something the July earnings report will reveal.

At the bourse, the stock has held up reasonably well. The share recently traded at €50.57, representing a year-to-date gain of just over 13%. That puts it roughly 8% below the 52-week high of €55.05 set in mid-April, but comfortably above the 200-day moving average of €46.79. The conclusion of the coatings transaction and the channelling of the sale proceeds into buybacks could provide a fresh demand catalyst, though the immediate focus for investors is whether cost reductions can compensate for the loss of the current repurchase support.

One area where BASF may be leaving investor goodwill on the table is digital communication. A study by Instinctif Partners awarded the company 90 out of 100 points for the technical quality of its digital outreach, but only 50 points for the “messaging” category. Analysts note that BASF rarely actively articulates its digitalisation strategy to shareholders, missing a chance to make its technological transformation more visible. With the stock now more dependent on operational performance and strategic execution, closing that communication gap could help build confidence in the months ahead.

For now, all eyes are on two milestones: the finalisation of the coatings deal and the successful rollout of CoreShift. If both deliver as promised, BASF may find itself in a stronger position to navigate the post-buyback landscape.