BASF Prepares €20-30 Billion Agri Spinoff While Slashing Costs at Home Under CoreShift

Investors in BASF got a double dose of strategic news on Monday as the chemicals giant unveiled plans for a partial initial public offering of its agricultural division while simultaneously accelerating cost cuts at its flagship Ludwigshafen site. The shares rose 3.67% to close at €48.59, bringing the year-to-date gain to 8.61% — though the stock still sits 11.73% below its 52-week high of €55.05 set on April 14.

The proposed listing of the crop protection and seeds business targets a valuation of €20–€30 billion, a sum that could exceed half of BASF’s current market capitalisation of €41.95 billion. The IPO is slated for the second quarter of 2027 on the Frankfurt Stock Exchange, with a minority stake of around 40% expected to be placed. That would raise roughly €10 billion, proceeds the company could channel into its green chemistry transformation or debt reduction. BASF has already approached financial institutions, and the selection of lead banks is due by autumn 2026.

The spinoff is seen as a potential catalyst to unwind the conglomerate discount that has long weighed on BASF’s shares. The agricultural business currently generates about one-sixth of group revenue — which totals roughly €60 billion — but its operating margin stands at 22%. Whether the market will grant that unit a valuation multiple comparable to rivals like Corteva remains the central question. If it does, the IPO could crystallise significant hidden value; if not, the ambitious price tag may prove hard to defend, especially with agricultural producer prices sliding 13.9% year-on-year — the steepest drop in eleven years.

Should investors sell immediately? Or is it worth buying BASF?

Parallel to the IPO preparations, BASF is pushing ahead with a new cost-cutting programme designed to shore up profitability at its home base. The “CoreShift” initiative, led by Julia Raquet from the newly created Core Transformation Office, aims to reduce cash-relevant fixed costs in the core business by up to 20% from 2024 levels by 2029. Chief Financial Officer Dirk Elvermann underscored the urgency of these savings for Ludwigshafen, where margins have been squeezed by high energy costs and weak global demand. The cost cuts are also seen as crucial to protecting the dividend, which analysts expect to rise to around €2.28 per share for 2026, up from €2.25 last year.

The tension between European retrenchment and Asian expansion remains a key theme. While BASF is trimming expenses in Germany, its new integrated Verbund site in Zhanjiang, China — inaugurated in March 2026 — is already running entirely on green electricity and is viewed as a central growth pillar for the Asian market. Mr Elvermann recently highlighted the site’s progress, reinforcing the company’s long-term bet on China even as it sheds costs elsewhere.

Technical indicators suggest the stock is in neutral territory for now. The 14-day relative strength index stands at 51.2, and the annualised 30-day volatility of 20.89% points to moderate swings. The 200-day moving average of €47.47 offers a support level, while the IPO speculation could provide enough momentum to retest the 52-week high — assuming market conditions remain supportive.

The next major test comes on July 29, when BASF releases its half-year results. The report will reveal whether CoreShift is already delivering operational savings and how deeply the sluggish global economy is affecting the Chemicals and Materials segments. For IPO watchers, the key dates are further out: the bank selection in the fourth quarter of 2026 and the eventual listing in spring 2027. In the meantime, the two-pronged story of cost discipline at home and value creation through a spinoff is likely to keep the stock in focus — though the agricultural price downturn serves as a reminder that execution risks remain high.

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