BASF's €10.3 Billion Evonik Approach Hits a Labor Wall as the RAG Foundation Holds the Cards

Evonik stock fell 2.1% to €20.96 as BASF considers a higher offer after its €22.15-per-share bid was rejected; job guarantees through 2032 are key.

Evonik's stock slipped 2.1% on Monday to close at €20.96, drifting just beneath its 52-week high of €21.62 — a peak reached during the flurry of speculation over a possible change of ownership. No company-specific catalyst drove the decline. For the Essen-based specialty chemicals group, the story remains one of strategic maneuvering rather than quarterly performance.

A Bid That Evonik Called Too Cheap

Roughly two weeks ago, BASF confirmed it was in exploratory talks with Evonik and the RAG Foundation about a potential takeover. An initial offer of around €10.3 billion — equivalent to some €22.15 per share — was rebuffed by Evonik as too low, according to Reuters. Depending on the valuation method applied, that figure represented either €10.3 billion or €14 billion for the company. The Financial Times has since put a conceivable valuation at roughly €12 billion.

The Ludwigshafen-based chemical giant is reportedly weighing an improved bid should formal negotiations materialize. One insider told the news agency that the existing proposal is not the final word — and market participants are speculating whether BASF might sweeten its terms to bring Evonik's management board and supervisory board to the table.

Employment Guarantees Become the Deal's Fulcrum

What BASF is prepared to put on the table goes beyond price. According to Reuters reports from people close to the company, the group would fully honor and contractually lock in existing site and employment guarantees in Germany through 2032. Compulsory redundancies would be ruled out, with any workforce reduction channeled exclusively through voluntary programs offering severance packages. BASF declined to comment officially.

That pledge carries a cost. Locking in protections through 2032 sharply narrows the room for short-term cost cuts after a merger, meaning any economic value would have to come from portfolio optimization, economies of scale and strategic growth instead. It also looks like a bid to defuse deep concerns among employees and their representatives.

The IG BCE union is pressing for reliable long-term prospects and binding investment commitments at existing sites. On October 8, the union sent an internal letter to works councils to sharpen the debate over preserving jobs. North Rhine-Westphalia's state government has weighed in as well, insisting that jobs and Evonik's independent development must not be jeopardized by a deal. The state parliament was due to debate the situation on Wednesday. The SPD parliamentary group has even floated a state stake, which together with the foundation would secure a controlling majority of more than 50%.

The 43% Shareholder Staying Silent

The decisive voice belongs to the RAG Foundation, Evonik's anchor investor. It currently holds 43% of the company but had already signaled its intention to reduce that stake to 25.1% over time. On October 9, the foundation's board of trustees declined to take a position on BASF's interest, instead directing the two companies toward bilateral talks.

Analysts Reprice, With a Floor in Sight

The capital markets have been adjusting their views. Berenberg upgraded the stock from "Sell" to "Hold" just over a week ago and trimmed its price target to €20. Analyst Sebastian Bray saw BASF's interest as a potential floor for the share price. On October 6, research firm Parmantier & Cie reaffirmed its "Hold" rating with a €20.50 target.

The muted market reaction to the job-protection headlines was on display again in today's session: Evonik shares shed 2.2% to €20.94, leaving the specialty chemicals group with a market capitalization of €9.78 billion.

The Quarter That Will Frame the Talks

Beyond the takeover drama, attention is turning to the operating business. Evonik is scheduled to publish its interim report for the third quarter on November 3, 2026 — a release that should shed light on how conditions are developing in its core segments, and on the fundamental base underpinning the negotiations.