BASF raises Evonik takeover bid to 11.2 billion euros
BASF increased its acquisition offer for Evonik to 11.2 billion euros, citing strong Q3 results and projected synergies. Analysts remain divided on the deal's value, with price targets ranging from 44 to 61 euros.
BASF CEO Markus Karmid reaffirmed the company's plans to acquire Evonik, raising the proposed offer from 10.3 billion to 11.2 billion euros. The move follows a strong third quarter in which BASF reported revenue up 14% to 16.4 billion euros and adjusted EBITDA up 15% to 1.64 billion euros, beating consensus estimates. The company has cut 8,600 jobs since early 2024 as part of its restructuring efforts.
Parmentier analysts model 700 million euros in annual synergies from a merger, projecting a combined EBITDA of 11.8 billion euros and free cash flow of 3.7 billion euros. They raised their price target for BASF to 61 euros, expecting a 21% total return in 12 months. However, other analysts are more cautious; Jefferies maintains a price target of 44 euros. BASF's Agriculture Solutions division is being prepared for a potential IPO, with Parmentier valuing it at 27 billion euros.
Despite the raised bid, BASF faces cash flow constraints. The company's free cash flow was negative 1.04 billion euros in the first nine months, requiring 2.5 to 3.3 billion euros in Q4 to meet annual guidance. Analysts are divided on the merger's value, with some seeing significant synergies and others concerned about integration costs and the company's current liquidity position.