BASF explores Evonik deal with feed ingredients in focus

GERMANY – BASF is considering a potential takeover of Evonik, a major producer of animal-feed ingredients, as the German chemicals group seeks to consolidate its portfolio and reduce costs.

BASF confirmed it had approached Evonik regarding a potential takeover offer after reports of discussions emerged. Evonik also confirmed receipt of a non-binding approach, although no agreement has been reached.

Evonik produces specialty chemicals used across several industries, including additives and ingredients for animal nutrition. 

BASF, meanwhile, operates across chemicals, plastics and consumer ingredients and has been restructuring its portfolio since Markus Kamieth became chief executive in 2024.

The potential deal comes as European chemicals producers face high energy costs, weak demand and growing competition from lower-cost producers outside Europe.

Evonik reported an EBITDA margin of about 13% in 2025, compared with an estimated 9% for BASF’s core businesses, according to Deutsche Bank. 

Analysts said the companies also sell different products to some of the same customers, including animal-feed producers.

The deal could create cost savings through overlapping operations and greater scale. Bernstein estimates that savings equivalent to 5% of Evonik’s 2025 sales would amount to around €700 million (US$819 million) annually.

However, the potential acquisition also faces challenges. Evonik is already implementing a restructuring program that includes thousands of job cuts, potentially limiting additional savings available to a buyer.

German labor unions could also make further restructuring more difficult, while competition concerns could arise where the two companies have overlapping products, analysts said.

Evonik’s largest shareholder, RAG-Stiftung, which holds a 44% stake, could also seek a higher premium for its shares.

BASF has not attempted a takeover of this scale in two decades. Its current restructuring program includes plans to reduce costs and sharpen the focus of its business portfolio.

The potential transaction could change the ownership and strategic direction of a major supplier of animal-nutrition ingredients, although the impact will depend on whether BASF makes a formal offer and the terms of any eventual deal.

Sign up HERE to receive our email newsletters with the latest news updates and insights from Africa and the World, and follow us on our WhatsApp channel for updates.