BASF is pressing ahead with plans to separately list its Agricultural Solutions business, with chief executive Markus Kamieth telling reporters that preparations for the initial public offering remain on track despite challenging agricultural market conditions.
“The preparations for the planned IPO of Agricultural Solutions are on track, giving us confidence that the business will be IPO-ready by mid-2027,” Kamieth said during the company’s third-quarter earnings call.
He added that the transition of the global business into separate legal entities supported by an industry-specific ERP system was already largely complete.
Chief financial officer Dirk Elvermann later revealed that around 80% of the carve-out work had already been completed, describing Agricultural Solutions as a “very good and strong business” that BASF plans to showcase in greater detail at its Capital Markets Day in November.
Weak quarter for agriculture
The IPO update came as BASF reported a difficult third quarter for the Agricultural Solutions division.
Sales fell almost 20% year on year to €1.4bn, which Kamieth attributed to lower volumes, particularly in South America, where farmers continue to face economic pressure.
Elvermann said conditions remained difficult across the region, citing adverse weather, lower farm incomes and intense competitive pressure on pricing.
“In South America, the business as a whole is difficult for the whole industry,” he said.
BASF also noted that some sales had been brought forward into the second quarter ahead of a major ERP software migration completed on 1 July, creating an expected drag on third-quarter results.
Recovery expected in fourth quarter
Despite the weak quarterly performance, management struck a confident tone on the outlook for the agriculture business.
Elvermann said the software migration had now been completed and expressed confidence that the division would deliver the usual seasonal improvement in the fourth quarter.
“The technical problems are behind us,” he said.
Benchmarking against peers
Asked about agricultural sector valuations and comparisons with Syngenta’s planned stock market ambitions, Elvermann said BASF was closely monitoring peer companies but cautioned that direct comparisons are difficult because of differences in geography, business models and the balance between crop protection and seed operations.
Nonetheless, BASF’s decision to continue with the separation process despite near-term market headwinds indicates the company believes Agricultural Solutions can command a stronger valuation as a standalone agribusiness than it currently receives within the broader BASF portfolio.
