BASF moved four $28 billion businesses toward the exit to refocus on core chemicals

What was changed

BASF, the world's biggest chemical company, set out a strategy in a September 26, 2024 analyst briefing in Ludwigshafen that could see it exit agrochemicals, battery materials, coatings and environmental catalysts — four businesses with combined sales of about $28 billion in the prior year, 37% of the group total.

CEO Markus Kamieth, who took over in April 2024, framed the plan as a return to the company's DNA: chemicals, materials, industrial solutions, and nutrition and personal care stay core, while BASF refocuses on sustainable products made from recycled or renewable materials. "The green transition is changing the setup," he said. "We want to be—and remain—a chemical company at our core."

Each non-core business gets its own path: BASF aims to ready agrochemicals for an initial public offering by 2027 while remaining majority shareholder in the medium term; it will seek a partner for battery materials and fill existing capacity rather than build new plants; for coatings it will explore strategic options including partnership or sale, starting with divesting the decorative paint business in Brazil; the environmental catalyst and metal business will seek out collaborations.

Alongside the portfolio moves, BASF announced a Ludwigshafen cost-cutting program targeting $1.1 billion in annual savings by 2026, half from activities such as process optimization and, in the other half, major headcount reduction — on top of an existing plan to cut companywide costs by $1.2 billion annually, also by 2026.

Why it worked

Kamieth said the green transition is changing the company's setup and BASF faces "the moment of truth" as a company.

The four non-core businesses had combined sales of about $28 billion — 37% of BASF — but the company no longer considers them core.

BASF wants to unlock the financial value of the non-core businesses while refocusing core activities on sustainable products from recycled or renewable materials.

Ludwigshafen personnel costs had to come down, per board member Katja Scharpwinkel, who is responsible for European operations.

What can be applied

When the ground shifts under a broad portfolio, decide what the company's DNA is first — then give each non-core business its own route out instead of one blanket sale.

Aftermath

The story was corrected on October 8, 2024 to clarify that BASF plans to remain a majority shareholder of the agrochemical business in the medium term after any 2027 IPO. The Brazil decorative paints divestment was described as the nearest-term move. Morgan Stanley's analyst questioned whether sustainable products could lift profits, and Kamieth conceded that getting premium prices for green products is still "hit and miss."