Carlyle Group has emerged as the leading bidder for BASF’s coatings business, in a deal that could value the division at around €6bn ($7bn), according to Bloomberg.

The US buyout firm is negotiating final terms after a rival consortium led by KPS Capital Partners withdrew from the process. BASF may retain a minority stake as part of any agreement, with a final decision expected in the fourth quarter.

The coatings business, which includes BASF’s automotive OEM coatings, refinish coatings, and surface treatment operations, generated approximately €4.3bn in sales in 2024.

BASF Chief Executive Markus Kamieth has been restructuring the company to counter high energy costs and weaker global demand. The group has recently taken steps to streamline its portfolio, including the €1.15bn sale of its Brazilian paints business to Sherwin-Williams and plans to list its agriculture chemicals division, which could be valued at more than €20bn.

Carlyle has not yet reached a final agreement, and discussions could still fall through. Other bidders, including Lone Star Funds, Platinum Equity, and Dutch paint manufacturer Akzo Nobel, had also expressed interest earlier in the process.

The potential deal follows a wider European trend of industrial groups divesting non-core assets to focus on higher-growth areas and strengthen shareholder returns.

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