BASF will not overpay for Evonik, CEO says after another outlook hike

By Tristan Veyet and Patricia Weiss

Oct 28 (Reuters) - BASF will not overpay for acquisition target Evonik, its CEO said on Wednesday, after the German chemicals giant raised its outlook for the second time this year.

Two people close to the potential deal told Reuters last week that BASF had raised its takeover offer for Evonik to €24 per share, which would value its domestic peer at €11.18 billion ($12.43 billion).

"We will only pursue a potential transaction if it is value accretive for our shareholders," CEO Markus Kamieth told analysts during BASF's post-earnings call.

Arne Rautenberg, chief investment officer for equities at BASF shareholder Union Investment, told Reuters that he welcomed the new "disciplined" offer price. "Evonik is an attractive asset for BASF, but not at any price," he said.

Shares of BASF and Evonik were down more than 1% at 1014 GMT. Union Investment holds an around 0.46% stake in BASF, according to LSEG data.

PRICE HIKES LEAD QUARTERLY GROWTH

The closure of the Strait of Hormuz has been an unexpected boon for German chemical businesses, as Middle East supply disruptions drove up local demand, bolstering the struggling sector even as energy prices soared.

BASF booked sales of €16.4 billion in the third quarter, nearly 5% more than analysts polled by the company had expected, driven by price increases aimed at offsetting energy costs and, to a lesser extent, improving volumes.

The company said it expected its adjusted core earnings to land between €7.4 billion and €7.8 billion ($8.2 billion and $8.7 billion) this year, up from the range of €6.9 billion to €7.7 billion it had given in July.

In the Greater China business region, which includes Hong Kong, Macau and the democratically governed island of Taiwan, sales grew by around one-third, led by 20% growth in sales volumes.

AGRICULTURAL UNIT SPINOFF ON TRACK FOR MID-2027

BASF's agricultural business, which it plans to list on the Frankfurt stock exchange, was the only outlier against otherwise broad revenue growth, recording a 20% sales slump compared with last year.

The company aims to list the business by mid-2027. The unit competes in seeds and pesticides with Bayer, Corteva and Syngenta, which is planning an initial public offering in Hong Kong.

Syngenta's advisers are targeting a valuation of at least $66 billion in the Swiss-Chinese agrochemical group's planned Hong Kong listing, which is likely to take place early next year, two people familiar with the matter told Reuters.

($1 = 0.8993 euros)

(Reporting by Tristan Veyet in Gdansk, Patricia Weiss in Frankfurt; editing by Milla Nissi-Prussak)