BASF is prepared to preserve Evonik Industries' existing employment and site guarantees in Germany if it proceeds with a takeover of the specialty chemicals manufacturer, according to a Reuters report published on October 12. Two people close to BASF said the Ludwigshafen-based chemicals group was willing to incorporate these commitments into a potential acquisition agreement, maintaining protections against compulsory redundancies until 2032. The proposed assurances follow growing concerns among politicians and labor representatives in North Rhine-Westphalia about possible job losses and changes to Evonik's German manufacturing operations.
Under Evonik's existing employment agreements, compulsory redundancies for operational reasons are prohibited in Germany through the end of 2032. Any workforce reductions must instead be carried out through voluntary departures, early retirement arrangements and severance payments. According to the sources, BASF considers itself bound by these provisions and would not attempt to weaken them following an acquisition. The company declined to comment when approached by Reuters regarding the reported commitments.
The development follows several weeks of discussions surrounding a possible combination of two of Germany's major chemicals manufacturers. Evonik confirmed in September that BASF had approached the company about a potential acquisition, although formal negotiations were not underway. People familiar with the discussions subsequently revealed that Evonik had rejected an initial offer of approximately €10.3 billion, equivalent to €22.15 per share, on valuation grounds. On October 9, two sources close to BASF indicated that the company could increase its proposal if negotiations resumed. No revised formal offer has been announced.
Employment protection has emerged as a central issue in the proposed transaction. Germany's chemical workers' union IG BCE has demanded long-term employment prospects for Evonik workers and firm investment commitments for the company's German production sites. The government of North Rhine-Westphalia, where Evonik is headquartered, has also expressed concern about the consequences of a takeover. State officials said last week that Evonik's existing jobs and independent development should not be jeopardized by any acquisition.
The state could have considerable influence over the transaction through the RAG Foundation, Evonik's largest shareholder. North Rhine-Westphalia's state premier, Hendrik Wüst, sits on the foundation's board of trustees, whose approval would be required for a sale of its Evonik shareholding. The state parliament is scheduled to debate the potential takeover on October 14, bringing the employment and industrial investment implications of the proposed transaction further into focus.
Evonik is already implementing a substantial restructuring program. In June, the company announced plans to eliminate approximately 3,200 positions worldwide between 2027 and 2029, including 2,150 jobs in Germany. The additional reductions follow an earlier cost-cutting program expected to remove around 2,800 positions by the end of 2026. Evonik also plans to discontinue its global polyester business in 2027, affecting operations in Witten and Marl in Germany and Shanghai in China. The company has cited weak economic conditions, increasing international competition and structural disadvantages in Europe as reasons for the restructuring.
A potential combination would bring together businesses spanning specialty chemicals, advanced polymers, industrial materials and performance additives. BASF maintains operations in engineering plastics, industrial chemicals and functional materials, while Evonik supplies high-performance polymers, animal nutrition ingredients, coatings additives and personal care chemicals. BASF has not announced a revised acquisition proposal, and the two companies have not confirmed the resumption of formal takeover negotiations.
