The agricultural division of chemical giant BASF is preparing for an initial public offering (IPO), which is scheduled to take place by 2027. By then, the business unit is to be transferred into new, globally structured entities capable of operating independently. The restructuring includes, among other things, the adaptation of IT systems. A targeted marketing process for the planned IPO has not yet begun, but initial structural changes are already noticeable. According to division head Livio Tedeschi, the unit is no longer competing for investments with other business areas such as petrochemicals or nutrition.
By separating from the parent company, the agricultural division gains greater entrepreneurial freedom. In the future, investments will be decided independently, even though overall financial targets will still be set by BASF. The research budget has been increased to ten percent of revenue. This aims to strengthen the unit’s innovative capacity in order to remain competitive over the long term.
The spin-off of the agricultural division is part of a broader strategy introduced last year by BASF CEO Markus Kamieth, who wants to focus the company more strongly on its core activities. Agricultural chemistry is no longer considered a core business of BASF. A specific location for the IPO has not yet been determined. Various options are currently being assessed based on factors such as costs and capital availability. The current plan is to initially sell only a minority stake.
The agricultural division is expected to be particularly attractive to investors. Tedeschi points to an expected value creation of €7.5 billion by 2034 from the product pipeline. In 2024, the agricultural business generated nearly €9.8 billion in revenue and an adjusted EBITDA of €1.9 billion. However, the operating margin declined to 19.8 percent, primarily due to price pressure in the herbicide segment.
A key focus is on expanding the seed business. This area’s share of sales is expected to rise from 22 to 25 percent, partly through the introduction of a new hybrid wheat by the end of the decade. External partnerships and smaller acquisitions are also being considered. Additional new products are planned in segments such as insecticides, herbicides, fungicides, and nematode control. According to Tedeschi, the acquisition of Bayer’s seed business in 2018 played a key role in reshaping the division’s strategy.
