BASF's Overture Puts Evonik's Overhaul in the Spotlight as JPMorgan Stays Bearish
Published on 09/28/2026 at 14:51 | Editorial boerse-global.de
Evonik's stock has become a battleground between deal-hungry traders and skeptical analysts after BASF made an unsolicited approach toward its fellow German chemicals group. The Essen-based specialty chemical maker confirmed that BASF submitted a non-binding proposal to Evonik Industries and its largest shareholder, the RAG-Stiftung, regarding a possible voluntary public takeover offer. BASF was quick to stress that the outcome of the exploratory talks remains entirely open, and Evonik made clear that no negotiations are currently underway between the parties.
The overture, first reported by Reuters, jolted the market. According to the Financial Times, which cited insiders describing the move as a merger proposal, the shares briefly surged by double digits. By Friday's close, the stock had settled at EUR 19.44, a daily gain of 7.9%, after touching its 52-week high of EUR 20.00 at the peak of the session.
A Valuation Gap Opens Between Traders and Analysts
Not everyone shares the market's enthusiasm. Chetan Udeshi of JPMorgan ran the numbers on the strategic and financial logic of a combination and came away unconvinced, keeping his "Underweight" rating on Evonik with a price target of EUR 14 — far below current levels. The divergence lays bare the tension running through the stock: recent trading has been driven by takeover speculation, while fundamental analysts see considerably less value in the equity. On Monday, the shares were changing hands at EUR 19.23, down 1.1%.
For existing shareholders, the calculus has shifted. Where the operational restructuring once dominated the investment case, the prospect of a transaction premium now drives sentiment. The key question facing investors is whether to lock in the gains accumulated over recent sessions or hold out for further upside.
Should investors sell immediately? Or is it worth buying Evonik?
The RAG-Stiftung Holds the Cards
The decisive factor in how events unfold sits with Evonik's ownership structure. As the dominant anchor shareholder, the RAG-Stiftung controls the company's strategic options. Without the foundation's explicit blessing, any merger or takeover bid against the will of Evonik's management is inconceivable. So far, the foundation has given no public signal on whether it would be prepared to sell or contribute its stake — a decision that touches not only economic criteria but also the foundation's long-term charitable purposes and its regional interests in North Rhine-Westphalia. Market participants will need to watch closely whether the foundation even agrees to exploratory discussions.
Equally uncertain is how Evonik's management would respond to a formal courtship. With no talks currently taking place, BASF would have to seize the initiative and dangle financial incentives to bring the executive board to the table. Absent movement from either of these two key players, any merger scenario remains purely hypothetical.
Cost-Cutting Runs in Parallel to the Deal Talk
Whatever happens on the M&A front, Evonik is pressing ahead with a sweeping savings drive. On September 22, the company announced it would cut 3,200 jobs worldwide by 2029, with 2,150 of those positions located in Germany. The move comes on top of the already-running "Evonik Tailor Made" programme, which covers the elimination of 2,800 roles through the end of 2026. Management is responding to persistent cost pressure and difficult conditions in the chemicals business.
The restructuring is already leaving visible marks on the production network. Beyond the headcount reductions, Evonik is shedding individual business lines and shuttering smaller operations in a bid to lower administrative costs and strengthen its core activities. The polyester business will be wound down by 2027, and the Witten site, which employs 266 people, will close — a step the company announced just days ago. The plant, like other smaller units, had been under review by group leadership.
Earlier, on September 11, management announced the abandonment of two small sites in 2027: Hamburg, with 50 employees, and the Bitterfeld facility. Supply will in future be handled by the larger sites in Essen and Rheinfelden. Hamburg produces cosmetics and personal-care products, while Bitterfeld manufactures chlorosilanes. By concentrating operations in Essen and Rheinfelden, Evonik aims to reduce overcapacity.
Portfolio Shedding Adds Firepower to the Balance Sheet
The company is also pushing ahead with divestments of peripheral activities. The sales of infrastructure company Syneqt GmbH and the C4 chemicals business Oxeno GmbH are being pursued on schedule. If these portfolio measures are executed swiftly, the company could bring significantly strengthened earnings power to the table even in the event of a merger.
Should the exploratory talks lead to concrete negotiations, shareholders could see further upside. A voluntary public takeover offer is typically pitched at a meaningful premium to the unaffected average share price. BASF would need to present owners with an offer that economically surpasses both Evonik's standalone prospects and its ongoing savings measures.
Evonik at a turning point? This analysis reveals what investors need to know now.
The Bear Case: Premium Evaporation and Regulatory Hurdles
Against that optimistic scenario stands a tangible risk that investors should not underestimate. Even at the first reports of possible interest, traders assessed the probability of an actual transaction with skepticism. If the approach fizzles out, the takeover speculation could drain from the share price in short order. In such a scenario, the stock would have to be measured once again against the pure fundamentals of the European chemicals sector, which remains burdened by high energy costs, geopolitical uncertainty and hesitant demand. An abrupt retreat to pre-merger levels would be the immediate consequence of a declared end to talks.
Even if both groups were to reach broad agreement, considerable execution risks remain. A combination of two industry heavyweights would inevitably draw the attention of European competition authorities. Months of scrutiny, stringent conditions or even a veto could weigh on the transaction and block the valuation premium over an extended period.
What Investors Should Watch Next
Positioning over the coming days will hinge on clear signals from the companies involved. As long as the share price can defend its recently established level, the market is pricing in a realistic chance of a deal. If sentiment flips on a formal rejection from the RAG-Stiftung, a rapid unwinding of the gains is likely. The next concrete catalyst is an official statement from BASF or the foundation on the start — or definitive end — of formal talks. Details on progress with the sales of subsidiaries Oxeno and Syneqt should also prove direction-setting. Investors would be wise to monitor the news flow closely for substantive announcements from management.
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