Evonik’s takeover puzzle widens as BASF weighs a richer bid

Evonik’s shares are being pulled in two directions at once: by the prospect of a higher BASF offer and by mounting resistance from politics and the company’s own gatekeepers. The stock closed at 21.10 euro yesterday, leaving it just below the 52-week high of 21.84 euro, after a year-to-date gain of 58 percent that has been driven in large part by takeover speculation.

BASF is understood to be open to improving its approach, but only after getting a closer look at Evonik’s books. The first proposal, worth 22.15 euro per share and valuing the Essen-based group including debt at more than 14 billion euro, was rejected by Evonik’s board as too low. A second, higher offer could still come, though the path there remains anything but straightforward.

The stumbling blocks are both industrial and political. Evonik has said official talks are currently on hold, while BASF wants to respect existing agreements and has signaled that any move would have to come with clarity on site and job protections. Reports have also pointed to possible commitments not to carry out involuntary redundancies in Germany until 2032, with any workforce reduction to be handled on a voluntary basis. BASF is also said to be looking at sales of the Oxeno and Syneqt divisions.

In Düsseldorf, the temperature has risen further. North Rhine-Westphalia economy minister Mona Neubaur has spoken out against a takeover, and the state government’s line is that a BASF purchase of Evonik should be blocked to protect jobs and the industrial base. The matter was debated in the state parliament on Wednesday at the request of the SPD, and the party even floated state participation alongside the RAG Foundation to secure a majority. Neubaur did not name any concrete steps to stop the deal, but the political pressure is clear.

That political backdrop matters because the RAG Foundation holds around 43 percent of Evonik and therefore sits at the centre of any takeover calculation. Evonik also employs more than 11,000 people in North Rhine-Westphalia, giving the issue a strong regional dimension. Without a workable stance from the foundation and room for negotiation with the company, any improved offer from Ludwigshafen would still face a difficult reception.

Market participants are already sketching out the upside if the process does move forward. Berenberg analyst Sebastian Bray upgraded the shares on 5 October from “Sell” to “Hold” and set a target of 20 euro, citing takeover interest. On 6 October, Parmantier & Cie. also confirmed a “Hold” rating and a 20.50 euro target. Separately, one Berenberg analyst has said that, in the event of a deal, 24 to 25 euro a share would be conceivable.

A stronger bid would also have to clear the hurdle of due diligence. Until Evonik opens a data room, BASF cannot formally reprice its approach. That leaves the whole process dependent on whether the two sides can shift from public statements to confidential talks. Markus Kamieth, BASF’s chief executive, has acknowledged the industrial logic of combining the businesses, but a hostile route against management, employees and state politicians would carry considerable risk.

For now, the stock is already pricing in some of that optionality. Before BASF’s initial approach became public, Evonik was trading at just over 18 euro. If the talks collapse because access to the books is denied or the political resistance becomes insurmountable, the takeover premium could disappear quickly and the shares would likely be measured again against the fundamentals of a still-challenging specialty chemicals market.

There are also fresh external factors that could affect sentiment. On 15 and 16 October, the EU summit in Brussels is expected to discuss defensive measures against cheap chemical imports from China, an issue the German government has reportedly been pushing. Evonik itself will then update investors on 3 November 2026 with its third-quarter report, a date that should provide the next hard evidence on operations and the company’s strategy as the takeover story unfolds.