Evonik Rejects BASF's €10.3 Billion Takeover Bid as Too Low, Sources Say

German chemicals manufacturer Evonik has rejected a €10.3 billion ($11.7 billion) takeover bid from industry giant BASF, deeming the offer too low, according to sources close to the negotiations cited by Reuters on Monday.

The Proposed Deal

BASF, one of the world's largest chemical producers, reportedly offered approximately €22.15 per share for Evonik. The unsolicited bid was made public after BASF confirmed on Friday that it was in exploratory talks with its German rival.

Both Evonik and its largest shareholder, the RAG foundation, have declined to comment on the matter. In a statement on Monday, BASF said it was taking a "disciplined approach" and that any price was "based on a potential for synergies that can only be verified if Evonik is involved."

Market Reaction

News of the rejected offer spurred a positive reaction in Evonik's stock. Shares in the company were trading up 1.6% at €19.8 by Monday afternoon, a significant increase from their closing price of €18.07 on Thursday before news of BASF's interest emerged.

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Conversely, shares in BASF were little changed on Monday after falling 3.6% on Friday following the confirmation of talks. The market's reaction suggests investors are weighing the potential costs and benefits of a large-scale acquisition for BASF.

Strategic Context

BASF is currently in a tight race with China's Sinopec for the top global ranking by chemical revenue. In the last fiscal year, BASF's group revenue of €59.7 billion was nearly identical to that of Sinopec's chemicals division, adding pressure for strategic growth.

A merger would combine BASF's broad portfolio of engineering plastics and industrial chemicals with Evonik's specialized products, which include high-tech plastics, feed additives, and ingredients for coatings. The potential for cost savings and market consolidation through such synergies is a key factor in the valuation of any potential deal.