BASF Balances Recycled-Plastic Push and Indian Expansion Against High-Stakes Evonik Talks

BASF launched lower-carbon product lines, secured a Gujarat plot for a possible MDI plant, and confirmed Evonik takeover talks as German chemicals sentiment improves.

BASF has spent the past week rolling out a string of lower-carbon product lines while quietly laying the groundwork for a major Asian investment — all against the backdrop of a potential multi-billion-euro takeover that has the German chemicals sector buzzing.

New Materials Target Automotive and Packaging Customers

On Wednesday the Ludwigshafen-based group widened its Ultradur® portfolio, unveiling glass-fibre-reinforced PBT/PET compounds that incorporate as much as 30% post-consumer PET recyclate. The materials are aimed at technical applications, above all structural automotive components. Two days earlier, on 23 September, BASF launched a new generation of paper-coating binders whose product carbon footprint runs 20% to 45% below that of conventional equivalents. Working alongside partner BOOXit, the company also introduced its Ultramid B3K BK00464 plastic as a material for reusable transport crates.

The flurry of launches underscores how heavily BASF is betting on resource-efficient products for industrial buyers, as demand for certified recycled content and lower-emission materials gathers pace in automotive manufacturing and packaging alike. Between 28 September and 1 October, the group also presented research at the IFSCC congress in Perth, Australia, covering sustainable extraction methods and novel approaches to skin regeneration.

Gujarat Site Secured, Investment Decision Pending

Further afield, BASF is advancing its Asian footprint. In India, the group is weighing a large-scale MDI investment, and through subsidiary BASF India Polyurethanes Private Limited it has already secured an industrial plot in Dahej, in the state of Gujarat. No final commitment has been made, however: the decision hinges on an ongoing feasibility study and the necessary local regulatory approvals.

Evonik Approach: Talks Confirmed, Terms Unsettled

These operational moves come amid strategic manoeuvring. Roughly a week ago, BASF confirmed exploratory discussions with the RAG-Stiftung and Evonik Industries AG over a possible acquisition of the Essen-based group. Evonik said it had received an unsolicited approach aimed at a voluntary public tender offer for all of its shares. Both sides stress that the outcome and continuation of the talks remain entirely open.

Reuters reported that Evonik turned down an offer of around €22.15 per share as too low. BASF declined to comment on that price level. According to media reports, BASF stock at one point gave up more than 2% intraday in the immediate aftermath of the takeover speculation becoming public. The merger talk has triggered intense debate in the market over the strategic logic and financial burden of such a transaction for the German chemicals industry.

Industry Sentiment Brightens, but Recovery Looks Fragile

The takeover chatter is unfolding as the mood in German chemicals finally lifts after months in the doldrums. The Ifo Institute's sector barometer climbed to plus 5.5 points in September from minus 2.6 a month earlier, while business expectations jumped from minus 15.0 to plus 2.3 points. Ifo expert Anna Wolf attributes the improvement to customers at home and abroad restocking inventories and accepting higher selling prices.

Geopolitical disruption has lent an extra hand. Supply interruptions in the Middle East linked to the Iran war, together with bottlenecks in Asian supply chains, pushed orders toward European suppliers — a shift that chiefly benefited makers of basic chemicals. Against that backdrop, BASF raised its profit guidance. Even so, industry observers are counselling caution: the German Chemical Industry Association sees no lasting turnaround yet, and the Ifo Institute likewise calls the recovery fragile, citing historically low order backlogs and persistent structural disadvantages at Germany as a production location.

Valuation Discipline in Focus as Shares Trade Above Key Average

The mixed economic picture is sharpening strategic pressure across the sector. BASF has stressed that it will hold firm on price discipline in the negotiations. On the equity market, the share price reflects that cautious optimism: BASF closed Friday's session at €50.16, up 13% since the start of the year and back just above its 200-day moving average of €49.66. Deutsche Bank Research reaffirmed its "Buy" rating on 28 September with a €60 price target, implying substantial upside from current levels.