Initial public offering BASF wants to float its agricultural division on the stock market

The chemical giant BASF wants to concentrate more on its core business. This has consequences for individual divisions.

BASF, the world's largest chemical company, wants to float its agricultural division on the stock market. This was announced by CEO Markus Kamieth at the presentation of the DAX-listed company's new strategy in Ludwigshafen.

The business is to be spun off into separate companies by 2027. After that, the conditions are to be created to float a minority stake in the division on the stock exchange in the medium term.

Focus on core business

In the coming years, the chemicals group will focus on strengthening its core businesses and growing profitably, explained Kamieth. By restructuring the Group, implementing cost-saving measures and reducing investments, the operating profit should increase significantly in the medium term.

Adjusted for special items, earnings before interest, taxes, depreciation and amortization (EBITDA) are expected to be between ten and twelve billion euros in 2028. In 2023, BASF earned just under 7.7 billion euros from operations, almost 29 percent less than in the previous year.

Less dividend

However, the chemical company BASF will probably no longer be able to pay as high a dividend as in previous years. According to the DAX-listed company, the direct profit share should be at least 2.25 euros per share in the coming years. BASF had still paid 3.40 euros per share for 2023.

The annual dividend amount will be around two billion euros in the coming years, it added. Between 2025 and 2028, a total of around eight billion will be distributed. This is to be supplemented by share buybacks. These will be targeted from 2027 at the latest and are expected to amount to around four billion euros.

High cost pressure

BASF is suffering from cost pressure and high energy prices. As a result, the DAX-listed company launched another cost-cutting program worth billions in February, including job cuts and plant closures.

In particular, the main plant in Ludwigshafen, the Group's largest production site, is to be reorganized to increase profitability. According to the latest cost-cutting program, additional annual costs of one billion euros are to be saved here by the end of 2026. It is not yet clear how many jobs will be cut in Ludwigshafen.