Evonik has rejected BASF’s increased offer of €24 per share, worth around €11 billion in total, resisting a merger that would create a chemicals group with annual revenue of approximately €74 billion. Evonik’s board says the company is better positioned on its own and is willing only to hold confidential discussions with BASF.

The companies’ leaders have presented their positions in video messages. BASF chief executive Markus Kamieth is advocating a combination, while Evonik interim chief Claus Rettig has outlined reasons for opposing it. In Essen, there is concern that the much larger BASF could absorb Evonik.

Evonik’s latest quarterly results have strengthened management’s case for independence. Revenue in the third quarter rose 13% year on year to €3.8 billion, its strongest increase in four years. Adjusted operating profit climbed 40% to €629 million. The company nevertheless reported a net loss of €53 million, including provisions of €313 million for an extended cost-cutting programme. Evonik plans further savings through 2029, including the elimination of 3,200 jobs worldwide.

Rettig maintained the company’s full-year forecast, which calls for adjusted operating profit of between €2 billion and €2.2 billion.

Evonik describes itself as a specialty chemicals company, in contrast to BASF. At its Goldschmidtstraße site in Essen, it has started operating a new facility for specialty silicones. The facility and a new storage tank are a €52 million investment. The silicones are used in products including insulation materials, mattresses, car seats, adhesives, paints and cosmetics. Evonik says the project will expand capacity, shorten transport routes and improve supply reliability. The Essen site has around 2,200 employees.

The proposed deal also has implications for the Ruhr region and the RAG Foundation, which owns about 43% of Evonik. The foundation uses returns on its assets to fund the long-term costs of coal mining, including pumping water from former mines. Selling or exchanging its Evonik stake could generate substantial proceeds, while a merger could put jobs and sites at risk, particularly in Essen.

BASF has pledged to honour existing commitments on jobs and locations, but concerns about future cuts persist. North Rhine-Westphalia Economics Minister Mona Neubaur stated in a state parliament debate that the regional government opposes the takeover and wants employees to remain at the site.

Sources: Tagesschau.