BASF Prepares Agricultural Unit for Independence as Evonik Question Looms

BASF overhauls Agricultural Solutions ahead of a possible IPO while weighing an Evonik takeover; shares fell 2.6% to EUR 50.89 but remain up 15% this year.

BASF is pressing ahead with a sweeping reorganization of its agricultural division while simultaneously weighing a far larger move in specialty chemicals, setting up a delicate balancing act for management and shareholders alike.

At the heart of the plan is Agricultural Solutions, which on Thursday unveiled both a leadership change and a broader institutional overhaul. Leta LaRush will take over as Senior Vice President USA on October 1, 2026, and a new global structure for the division is set to take effect on January 1, 2027. The internal tightening is widely seen as groundwork for a future capital markets step: roughly two weeks ago, BASF mandated banks for a potential IPO of the unit.

The carve-out is designed to give the agricultural business greater financial and strategic latitude in international competition, sharpening its focus on customer needs and shortening internal decision-making chains. For BASF shareholders, however, the gradual separation absorbs management capacity and reshapes the group's traditional integrated model.

Evonik Approach Draws a Cool Reception

Running parallel to those internal moves, a possible full takeover of Evonik Industries has moved into the spotlight. According to Evonik, no concrete negotiations are underway, as BASF's approach was non-binding. The RAG-Stiftung, which holds roughly 43 percent of Evonik, confirmed the contact and occupies a pivotal role in any eventual outcome.

Not everyone is convinced the idea has merit. Analyst Chetan Udeshi of JP Morgan Chase & Co. left his "Underweight" rating on BASF unchanged on Thursday, arguing that the tailwind from the special economic situation created by the Middle East war is fading and continuing to recommend selectivity in the European chemicals sector. He also criticized potential external acquisitions, calling an interest in Evonik strategically questionable given what he sees as better alternatives.

Market Hesitates, but the Year Still Shows a Gain

Investors responded cautiously to news of the exploratory talks. On Friday, BASF shares fell 2.6 percent to close at EUR 50.89. Despite that recent pullback, the DAX-listed stock is still up 15 percent since the start of the year.

The company can lean on an improved earnings picture as it pursues the restructuring. More than a month ago, BASF raised its full-year guidance and is targeting EBITDA before special items of between EUR 6.9 billion and EUR 7.7 billion, while leaving its free cash flow target range unchanged.

Earlier divestments add further room to maneuver. BASF completed the sale of its Coatings business to Carlyle more than a month ago, a step that generated a disposal gain of EUR 3.5 billion in the second quarter of 2026 and strengthened the balance sheet on which management is now building the agricultural spinoff.