Private Equity and Carve-Outs: The Next Chapter for Chemicals Leadership

For leadership teams, this creates a parallel challenge: how to reshape the business while retaining critical talent, assessing capability gaps and building the executive teams needed for a standalone future. 

BASF’s agreement to sell a majority stake in its coatings business to Carlyle, in partnership with Qatar Investment Authority, is a clear example. The transaction values BASF Coatings at €7.7 billion and includes its automotive OEM coatings, automotive refinish coatings and surface treatment businesses. BASF is expected to retain a 40% stake, with completion planned for the second quarter of 2026, subject to regulatory approvals. 

For the wider sector, this is more than a single divestment. It points to a question many large conglomerates are now facing: which businesses belong inside an integrated group, and which could create more value as focused, independently governed platforms?  

For talent leaders, it raises an equally important question: which executives can lead through separation, and where will external capability be needed? 

Portfolio discipline is reshaping chemicals 

Large chemicals groups have historically benefited from scale, however, the conglomerate model is under pressure and the complexity is harder to justify in the face of:  

• Weak European demand 
• High energy costs 
• Overcapacity in some value chains 
• Competition from lower-cost regions 

As a result, investors are placing greater scrutiny on capital allocation and carve-outs are being considered as a strategic tool. For sellers, they release capital and sharpen focus. For buyers, they offer established assets with customers, technical capability and scale already in place. 

Why private equity is well placed to act 

Private equity has a clear role in this environment. Carve-outs require separation planning, management assessment, operational improvement, cost discipline and a defined value creation roadmap. 

For chemicals assets, the challenge is rarely straightforward. These are complex businesses with regulated operations, technical products and specialist workforces. The BASF Coatings transaction illustrates the appeal: a scaled business with global customers and strong market positions that may benefit from more focused ownership. 

Private equity ownership can also change the performance rhythm. Decision-making often becomes faster, metrics become more visible and leadership teams are asked to move from divisional management to enterprise value creation. 

The leadership brief changes after a carve-out 

The talent implications are significant. A divisional leader inside a conglomerate may be highly effective within the systems, brand and governance of a parent company, however, that does not automatically mean they are ready to lead a standalone business. 

After a carve-out, the leadership team must often create or rebuild functions that were previously shared, including:  

• Finance 
• HR 
• Procurement 
• IT 
• Legal 
• Sustainability 
• Investor reporting 

Leaders must also establish a new culture, retain critical employees, reassure customers and maintain safety and operational standards through transition. 

This is creating demand for executives who combine sector credibility with transformation capability. In EMEA chemicals, the most sought-after leaders are becoming those who understand asset-heavy operations, customer relationships, regulatory requirements and the pace expected by private equity investors. 

• For CEOs and business unit leaders, the brief is to move from stewardship to value creation.  
• For CFOs, it is to set clear financial discipline and capital allocation.  
• For CHROs, it is to manage retention, redesign incentives and build a culture no longer defined by the parent company.  
• For procurement and operations leaders, it is to deliver efficiencies without damaging resilience, safety or technical quality. 

Incumbent talent is not always the full answer 

One of the most sensitive questions in any carve-out is whether the existing leadership team can scale into the new ownership structure. In many cases, incumbent leaders hold valuable customer, technical and organisational knowledge and losing them too quickly can create risk. 

However, private equity owners may also need to introduce leaders with prior carve-out, transformation or standalone experience. However, rather than replacing the leadership team, a better approach is to identify which leaders have the capability and appetite to remain, where the business needs additional expertise, and which external hires could strengthen delivery of the value creation plan. 

This makes early talent mapping critical. Waiting until completion can leave businesses exposed, particularly in functions historically provided by the parent group. Executive search, succession planning and organisational design need to run alongside commercial and operational diligence. 

Conclusion 

The BASF-Carlyle coatings transaction underlines a wider shift in European chemicals. Consolidation is becoming increasingly about reshaping where value sits: separating assets, simplifying portfolios and moving businesses into ownership structures that better support their next phase of growth. 

For large conglomerates, the challenge is deciding which assets still warrant internal investment and which may perform better outside the group, and for private equity, this creates an opportunity to turn carved-out divisions into focused, high-performing platforms.  

For talent leaders, the focus must be on assessing leadership capability early, addressing gaps and securing the executives needed to guide the business through separation. 

The next chapter of chemicals consolidation will be shaped as much by leadership capability as by deal structure. Organisations that understand this early will be better positioned to protect value, retain critical talent and build the standalone businesses the market increasingly demands. 

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Adam Harman

Partner | Industrials | EMEA

E: adam.harman@weareprocogroup.com

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