Heavyweights lead on €7.7bn PE buyout of BASF coatings business

Milbank, Latham and Freshfields have taken lead roles on the €7.7 billion sale of BASF’s coatings business to private equity firm Carlyle and Qatar Investment Authority (QIA), in one of Europe’s largest PE-led industrials deals of the year.

Under the terms of the agreement, German chemicals giant BASF will receive around €5.8 billion in pre-tax cash proceeds and retain a 40% equity stake in the newly created standalone company. The deal is expected to close next year, subject to regulatory approvals.

According to Bloomberg, Citi and Goldman Sachs are among a group of banks preparing a debt financing package exceeding €4 billion to support the acquisition.

The sale forms part of BASF's strategy to focus on businesses integrated within its global chemical production network. Combined with the earlier divestment of its decorative paints arm to Sherwin-Williams (which was led by Jones Day and Linklaters), the deal values BASF’s total coatings operations at around €8.7 billion, including debt.

Advising

Mibank advised Carlyle on the transaction, as well as on BASF’s reinvestment and the partnership with QIA, with a team led by Munich-based Corporate/M&A partners Sebastian Heim and Norbert Rieger.

Latham & Watkins acted for Carlyle on the carve-out, debt financing, and regulatory matters relating to the deal, led by private equity partners Shaun Hartley (Chicago) and Paul Sheridan (Washington DC).

Freshfields advised BASF, led by German partners Rick van Aerssen (Corporate/M&A) and Maximilian Lasson (Corporate/M&A).