Evonik's interest in bidding for Ashland reportedly cools

what happened

Bloomberg, citing people familiar with the matter, says Germany's Evonik has become less keen on acquiring US chemicals group Ashland Inc. Ashland stock slipped after the report but was back in positive territory by the time of publication.

Handelsblatt reported last month that Evonik was weighing a takeover of Ashland. Dealreporter also flagged that private equity firm Clayton, Dubilier & Rice teamed up with Switzerland-based Clariant on a potential offer. Apollo Management, Carlyle Group and possibly CVC Capital have also shown interest.

Separately, Bloomberg reported on Friday that Evonik and BASF SE executives are set to meet over the weekend, after Evonik turned down an improved BASF proposal last week. BASF chief executive Markus Kamieth and colleagues are expected to lay out their views on a tie-up. Sources did not say whether those talks would open the door to a formal process between the two companies.

why it matters

For Ashland holders, a weaker outlook for a bid means the takeover premium investors may have priced in could fade. The wider theme for the chemicals sector is BASF and Evonik: a combination of two large European players would reshape the field, so headlines on those talks could weigh on both companies' shares.

market impact

Ashland: fading bid hopes strip the takeover premium out of the share price

• ▼Ashland shares pressure down — fading buyer interest removes the takeover premium

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