Evonik Rejects BASF's €22.15-Per-Share Takeover Proposal, Leaving €10.3 Billion Deal at a Valuation Impasse

Board considers initial offer too low to open formal negotiations or grant due diligence access; RAG-Stiftung's 44% stake and Evonik's ongoing restructuring set the terms for what comes next

BASF's exploratory approach toward Evonik has hit its first concrete obstacle. According to reports, BASF submitted an initial proposal of approximately €22.15 per Evonik share, valuing Evonik's equity at roughly €10.3 billion ($11.7 billion). Evonik has rejected the offer, with the company reportedly considering the valuation insufficient to justify moving into formal negotiations or granting BASF access to detailed due diligence.

There are currently no active talks between the two companies. However, industry observers note that the rejection does not necessarily end the possibility of a transaction - it shifts the conversation from strategic rationale to price.

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Why Evonik Said No

The stated rationale behind the rejection is straightforward: Evonik's board did not consider the price high enough. BASF's proposal did represent a meaningful premium over Evonik's share price prior to takeover speculation entering the market. But a premium alone does not necessarily reflect a company's full value, particularly in a case where the acquirer stands to gain substantially from the combination itself.

Analysts point to several factors that may be shaping Evonik's valuation expectations, even though the company has not officially cited them as reasons for the rejection. A BASF-Evonik combination could generate meaningful synergies through shared procurement, production optimization, logistics, consolidated corporate functions, and improved utilization of select assets.

If BASF anticipates capturing substantial additional value after the acquisition closes, Evonik shareholders may reasonably expect a share of that anticipated value to be reflected upfront in the offer price, rather than accruing entirely to the acquirer after the deal.

Evonik's own ongoing transformation adds a further complication. The company is currently reducing costs, restructuring its organization, and reshaping its portfolio around specialty chemicals. Accepting a takeover now would mean shareholders forgoing the potential upside of that restructuring before it has had the chance to play out.

RAG-Stiftung's Position Remains Central

RAG-Stiftung, which owns approximately 44% of Evonik, continues to sit at the center of any potential transaction.

Given the size of its holding, the foundation's position is likely to be decisive in determining whether a deal ultimately advances. BASF has already approached RAG-Stiftung directly regarding a potential takeover, underscoring that any successful proposal will need to satisfy not just Evonik's management but also its largest shareholder.

Three Paths Forward for BASF

With the initial offer rejected, attention now turns to how BASF responds. Industry analysts outline three broad possibilities.

BASF could return with a higher offer, raising the per-share proposal enough to bring Evonik into formal discussions and unlock due diligence access. Alternatively, BASF could hold its current valuation discipline, concluding that a significantly higher price would erode the economic benefits of the acquisition to an unacceptable degree.

A middle path also exists, in which BASF modestly improves its proposal while seeking sufficient engagement from Evonik to better assess achievable synergies before committing to a substantially higher final valuation.

This dynamic creates a structural tension at the heart of the negotiation: the more BASF pays for Evonik, the larger the synergies it must eventually realize to justify the price. Yet without access to Evonik's books, BASF cannot fully verify how large those synergies could actually be. BASF has itself acknowledged that the potential synergies can only be properly validated with Evonik's cooperation - a cooperation that, for now, remains withheld.

An Opening Bid, Not a Final Answer

Market watchers are treating the €22.15 proposal as an opening position rather than a closing one. The more consequential question, they suggest, is what BASF does next: raise its offer and signal that Evonik is strategically valuable enough to warrant a higher price, or hold its valuation line and walk away if Evonik's expectations prove too high.

That decision is likely to determine whether BASF-Evonik develops from an intriguing consolidation concept into one of the most significant chemical industry transactions in Europe in recent years.

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