BASF Advances Restructuring with Sale of Brazilian Coatings Business
Headline: BASF Unloads Brazilian Coatings Business in Restructuring Push
Introduction:
Chemical giant BASF is making progress in its ongoing restructuring efforts. The Dax-listed company announced the sale of its Brazilian business for building coatings to US-based paint and coatings conglomerate Sherwin-Williams for 1.15 billion US dollars (1.1 billion euros).
Divestiture Details:
The building coatings business, with sales of around 525 million dollars in 2024, represented BASF’s primary business serving end consumers. The sale is part of a broader restructuring strategy. In the second quarter of 2025, BASF intends to explore further strategic options for its remaining coatings operations, including automotive coatings and surface treatments.
Restructuring Plan:
BASF CEO Markus Kamieth outlined a sweeping restructuring plan in September to revive the world’s largest chemical company from a downturn. This plan involves divesting non-core businesses, potentially listing the agricultural division on the stock exchange, and slashing shareholder dividends for the first time since 2010. Furthermore, the company anticipates additional closures of chemical plants at its headquarters in Ludwigshafen.
Ludwigshafen Site Negotiations:
Simultaneously, BASF is negotiating with the works council to avoid mandatory redundancies and modernize the Ludwigshafen site. According to a BASF spokeswoman, discussions regarding a new site agreement have commenced. Until the end of the year, an agreement remains in place prohibiting mandatory redundancies at Ludwigshafen.
Market Implications:
The sale of the Brazilian coatings business reflects BASF’s shift away from consumer-facing operations. The company is instead focusing on its core chemical activities and targeting industrial customers. The acquisition strengthens Sherwin-Williams’ presence in the Latin American market, particularly Brazil, where BASF held a dominant position in building coatings.
Challenges and Opportunities:
BASF’s restructuring faces challenges, including the potential loss of jobs and economic impact on affected communities. However, the company expects to improve its profitability and competitiveness by shedding non-core assets. The financial proceeds from the sale of the coatings business will provide BASF with additional resources to invest in its strategic priorities.
Conclusion:
The sale of BASF’s Brazilian coatings business to Sherwin-Williams marks a significant step in the company’s restructuring plan. The company aims to emerge from this transformation as a leaner, more focused chemical conglomerate. The negotiations with the works council over the Ludwigshafen site and future strategic options for remaining coatings operations will be closely watched as BASF navigates this challenging period.
