In a significant strategic move, BASF has entered into a definitive agreement to sell its Brazilian decorative paints business to Sherwin-Williams for a substantial $1.15 billion. The transaction, structured as a cash and debt-free deal, aligns with BASF’s ongoing portfolio optimization strategy under its "Winning Ways" initiative. This divestiture allows BASF to streamline its Coatings division, concentrating on core areas that better align with its long-term strategic objectives.

The sale encompasses BASF’s production facilities located in Demarchi and Jaboatao, along with the widely recognized Suvinil and Glasu! brands. Approximately 1,000 employees associated with the business will transition to Sherwin-Williams upon completion of the acquisition. The deal, which takes the form of a share deal, is anticipated to close in the second half of 2025, pending regulatory approvals from relevant competition authorities.

BASF’s Brazilian decorative paints business, generating impressive sales of approximately $525 million in 2024, has established itself as a prominent player in the B2C market. Offering a comprehensive range of paints, paint preparation products, and digital solutions, the business has enjoyed considerable success. However, its predominantly Brazil-centric operations, with limited synergy with other BASF Coatings businesses, prompted the company to reassess its strategic fit. This strategic review ultimately led to the decision to divest the business, allowing BASF to focus on areas where it can leverage stronger competitive advantages.

Anup Kothari, a member of the Board of Executive Directors at BASF SE and responsible for the Coatings division, expressed satisfaction with the agreement. He emphasized the deal as a significant step in realizing the value of BASF's standalone businesses and expressed delight in the swift progress made in securing a suitable new owner for the Suvinil brand. Kothari underscored Sherwin-Williams as an ideal custodian for the business, confident that the well-established Suvinil brand will flourish under Sherwin-Williams' leadership. He also acknowledged the invaluable contributions of BASF’s employees in building Suvinil into the leading decorative paint brand in Brazil.

Heidi G. Petz, Chair, President, and CEO of Sherwin-Williams, echoed this positive sentiment, emphasizing the synergistic fit of the Suvinil brand with Sherwin-Williams' existing operations in Latin America. Petz highlighted Suvinil’s 60-year legacy of innovation and quality, emphasizing that the acquisition will significantly strengthen Sherwin-Williams’ market presence in the region and deliver enhanced value to customers.

While the agreement marks a strategic shift for BASF, the company has assured a seamless transition for all stakeholders. Until the transaction is finalized, BASF will continue to operate the business independently, ensuring business continuity for customers. The company has also committed to engaging with employee representatives throughout the transition process, adhering to local practices and regulations.

Looking to the future, BASF plans to explore further strategic options for its remaining Coatings activities, encompassing automotive OEM coatings, refinish coatings, and surface treatment, in the second quarter of 2025. This proactive approach underscores BASF’s ongoing commitment to refining its portfolio and solidifying its position in a highly competitive global market. The divestiture of the Brazilian decorative paints business represents a significant step in this direction, allowing BASF to concentrate its resources and expertise on strategic areas that offer greater potential for long-term growth and profitability.