BASF is preparing a higher offer for Evonik after the specialty chemicals maker rejected a reported €10.3 billion ($11.6 billion) bid, equal to €22.15 per share, according to Reuters sources close to the German chemicals giant.

Evonik confirmed last month that it had received a non-binding approach from BASF regarding a voluntary public takeover offer for all outstanding shares. The company stated at the time that no talks were underway, and it reiterated that position this week. BASF declined to comment.

Sources close to BASF told Reuters the rejected offer was highly unlikely to be "the final word" — a signal that a second, richer proposal is in preparation.

What does a tie-up mean for the portfolio?

A BASF company source told Reuters last month that Evonik's portfolio fits the group well and could deliver cost benefits through synergies. Reuters sources added that a takeover would strengthen customer-facing business, boost resilience, and reduce BASF's dependency on the European market.

For cosmetics industry buyers, the implications are direct. Evonik is a major supplier of specialty ingredients — emollients, conditioning polymers, active delivery systems and formulation aids that appear across personal care INCI listings. A combined BASF-Evonik would pool two of Europe's largest personal care ingredient portfolios under one roof.

That concentration raises procurement questions. Formulators sourcing surfactants, emulsifiers and specialty actives from both houses could face a consolidated negotiation position, potential portfolio rationalization, and eventually a unified pricing structure. Supply continuity during any integration period will be a watch item for contract buyers.

Can politics block the deal?

The German state of North Rhine-Westphalia, where Evonik is headquartered, said earlier this week that jobs and the company's independent development must not be jeopardized by a takeover.

The state holds real leverage. Reuters reported that state premier Hendrik Wuest sits on the board of trustees of the RAG Foundation, Evonik's largest shareholder. Any hostile or insufficiently guaranteed offer would have to clear both the foundation and, implicitly, the state government.

Brussels presents a different calculation. The Financial Times reported last month that European regulators have voiced a growing appetite for larger, more competitive European champions — a shift from the bloc's traditionally cautious antitrust posture toward industrial consolidation. A BASF-Evonik merger would still face scrutiny, but the regulatory mood may be more accommodating than in previous decades.

Why BASF is under pressure to act

BASF risks losing its position as the world's largest chemicals company by revenue to China's Sinopec. Last year, BASF posted group revenue of €59.7 billion — almost identical to the chemicals division revenue of its Chinese rival.

A takeover changes that arithmetic materially. The two German companies generated combined revenues of €74 billion last year, which would restore a comfortable lead over Sinopec and create a European champion spanning commodity chemicals, performance ingredients and specialty portfolios.

The strategic logic tracks with BASF's broader repositioning. Adding Evonik's higher-margin specialty businesses would rebalance the group away from cyclical basic chemicals and European demand, toward customer-facing specialty lines that command steadier margins.

What happens next

Three milestones will shape the timeline: the size and timing of BASF's improved offer, the position taken by the RAG Foundation and the North Rhine-Westphalia government on jobs and independence guarantees, and any preliminary signals from Brussels on antitrust treatment.

Until a binding offer lands, Evonik maintains there are no talks — and BASF is saying nothing. Watch for the revised per-share figure as the next hard data point in the story.