Significant Events

On September 22, 2020, BASF announced that the Global Business Services unit is being further developed. The division was established as of January 1, 2020, as part of the implementation of BASF’s corporate strategy. As of that date, around 8,400 employees worldwide transferred to Global Business Services. They provide services for BASF ranging from financial and logistics processes to services in the areas of communications, human resources, environment, health and safety. Following the bundling of services and resources and the implementation of a wide-ranging digitalization strategy, the number of employees in Global Business Services worldwide will decline by up to 2,000 by the end of 2022. From 2023 onward, the division expects to achieve annual cost savings of over €200 million. Details of the planned realignment will be worked out in the coming months.

On September 30, 2020, BASF closed the divestiture of its construction chemicals business to an affiliate of Lone Star, a global private equity firm, as announced in December 2019. The purchase price on a cash and debt-free basis is €3.17 billion. The construction chemicals business now forms the MBCC Group, headquartered in Mannheim, Germany. With around 7,500 employees, the construction chemicals business operates production sites and sales offices in more than 60 countries and generated sales of around €2.6 billion in 2019.

The sale of the assets and liabilities of the construction chemicals business and the related disposal gain will be reflected in BASF’s reporting on the fourth quarter of 2020. Payments received until September 30 in connection with the transaction are included in the statement of cash flows for the third quarter of 2020.

On October 9, 2020, BASF provided advance notice that EBIT before special items amounted to €581 million in the third quarter of 2020, above analyst consensus but below the figure for the prior-year quarter (€1,056 million). The BASF Group’s EBIT amounted to minus €2,638 million due to non-cash-effective impairments and provisions for restructuring, below analyst consensus and the figure for the prior-year quarter (€1,336 million). Impairment tests identified fixed asset impairments of €2.8 billion due to considerably weaker macroeconomic developments as a consequence of the coronavirus pandemic. Net income amounted to minus €2,122 million due to the impairments, below analyst estimates and lower than the figure for the prior-year quarter (€911 million). BASF also published an outlook for the 2020 business year.

At the request of BASF SE, the Ludwigshafen local court (Amtsgericht) appointed Mr. Liming Chen (60), Chairman of IBM Greater China Group, to the Supervisory Board of BASF SE by way of a resolution dated October 8, 2020. The appointment became necessary after Dr. Alexander C. Karp, CEO Palantir Technologies Inc., resigned from the Supervisory Board at the end of July 2020 for professional reasons. The Supervisory Board intends to propose Liming Chen, the Supervisory Board member now appointed by the court, to the next Annual Shareholders’ Meeting of BASF SE on April 29, 2021, for election for the Supervisory Board’s remaining term of office, which ends on conclusion of the Annual Shareholders’ Meeting in 2024.