Mwb: BASF's Potential Takeover of Evonik 'Strategically Understandable'; Hold Retained

09:20 AM EDT, 09/29/2026 (MT Newswires) -- Mwb Research views BASF's (BAS.F) confirmed exploratory discussions over a potential acquisition of fellow German chemicals company Evonik Industries (EVK.F) as a "strategically understandable" move, but noted that the execution will be critical. "We see a reasonable industrial rationale for a combination. Evonik would increase BASF's exposure to specialty chemicals, including additives, specialty polymers and consumer-related ingredients, and could broaden the earnings base beyond BASF's more cyclical upstream activities," analysts said Monday. "At the same time, both groups retain substantial exposure to Europe, at roughly 40-50% of sales, leaving the combined group exposed to a region where weak demand, comparatively high energy costs and structural cost pressures remain key competitiveness challenges ... At this stage, we see the announcement primarily as an additional capital-allocation uncertainty rather than a reason to change our underlying BASF estimates." The research firm noted that a cash-funded acquisition could also impact BASF's recent deleveraging and reduce its flexibility to return capital to shareholders. Terms, financing structure or timetable for the proposed transaction were also not disclosed. "Evonik currently trades at around 6.5x 2027E EV/EBITDA, below BASF at approximately 7.7x, which provides a reasonable starting point from a relative valuation perspective. The eventual transaction multiple, financing structure and realized synergies will ultimately determine whether the deal creates value," mwb added. Taking these into account, mwb reiterated its hold rating on BASF's stock and price target of 55 euros.