BASF , the German chemical giant, has announced a significant strategic move in its global coatings business, with potential implications for its Indian subsidiary, BASF India Limited. The company has entered into a binding agreement with Carlyle, a global investment firm, and Qatar Investment Authority (QIA) for its automotive OEM coatings, automotive refinish coatings, and surface treatment businesses.

Deal Highlights

• Enterprise Value: €7.70 billion
• Expected Closure: Q2 2026 (subject to regulatory approvals)
• BASF's Stake: 40% equity in the new standalone company
• Cash Proceeds: Approximately €5.80 billion (pre-tax)

Impact on BASF India Limited

The global transaction's effect on BASF India Limited and its wholly owned subsidiary, BASF India Coatings Private Limited, is currently under evaluation. Key points to note:

• The automotive coatings business in India was transferred to BASF India Coatings Private Limited on January 1, 2025.
• As of March 31, 2025, the coatings business in India generated sales of Rs. 479.60 crore.
• This represents 3.10% of BASF India Limited's consolidated sales.

Financial Overview of Indian Coatings Business

BASF India Limited has stated that it will assess the implications of this global announcement on its operations and its subsidiary. The company has committed to updating the stock exchanges on further developments related to this transaction.

This strategic move aligns with BASF's global exploration of options for value creation in its coatings business, as previously announced on September 26, 2024. The transaction, once completed, is expected to create a new global standalone company in the coatings sector.

Investors and stakeholders of BASF India Limited are advised to monitor future announcements for a clearer picture of how this global deal will impact the company's local operations and financial performance.

BASF and Carlyle have finalized a binding agreement to establish a new global standalone coatings business, marking a significant development in the chemical industry. This strategic partnership between the chemical giant and the investment firm aims to create an independent entity focused on coatings operations.

Deal Structure and Valuation

The agreement encompasses BASF's automotive OEM coatings, automotive refinish coatings, and surface treatment businesses. Key details of the transaction include:

Impact on BASF India Limited

The global deal has implications for BASF's Indian operations:

• BASF India Coatings Private Limited, a wholly-owned subsidiary of BASF India Limited, now houses the automotive OEM coatings and automotive refinish coatings businesses.
• This transfer was effective from January 1, 2025.
• As of March 31, 2025, the Coatings business in India generated sales of Rs. 479.60 crore, representing 3.10% of consolidated sales.

Investor Participation

The deal involves participation from global investment firm Carlyle (NASDAQ: CG) in partnership with Qatar Investment Authority (QIA).

Regulatory Approvals and Timeline

The transaction is subject to customary regulatory approvals and is expected to close in the second quarter of 2026.

Future Outlook

BASF India Limited has stated that it will evaluate and assess the effect of this global announcement on its operations and its wholly-owned subsidiary, BASF India Coatings Private Limited. The company has committed to updating the stock exchanges on further developments related to this strategic move.

This partnership between BASF and Carlyle represents a significant shift in the global coatings industry landscape, potentially reshaping market dynamics and competitive positioning in the sector.