FRANKFURT (Reuters) – Chemicals group BASF will carve out its catalytic converter business to become a standalone subsidiary ready for “strategic options” as the German company shifts its focus to battery materials for electric vehicles, it said on Tuesday.
“The new standalone structure will prepare the business for the upcoming changes in the internal combustion engine market and allow for future strategic options,” Germany’s BASF said in a statement.
Those options have not been determined yet, a spokesperson added. The carve-out process will start in January and is expected to take up to 18 months, BASF said.
The move is the latest shakeup in the automotive catalyst industry after smaller rival Johnson Matthey last month laid out plans to put its battery materials business up for sale amid overwhelming competition.
BASF, Britain’s Johnson Matthey and Umicore of Belgium have combined the production of key materials for electric vehicles and combustion engines, competing in cathode materials for automotive batteries and catalytic converters.
But the strategic rationale is now in question.
BASF in September predicted battery materials revenues of more than 1.5 billion euros ($1.7 billion) by 2023 and more than 7 billion euros by 2030 as electric vehicle production surges.
The expansion would be fuelled by capital investments of 3.5-4.5 billion euros from 2022 to 2030, it said at the time. BASF reiterated that budget plan on Tuesday.
BASF is the largest chemicals supplier to the transportation industry, with more than 20% of sales to this market in 2020.
($1 = 0.8887 euros)
(Reporting by Ludwig Burger and Patricia Weiss; Editing by Madeline Chambers and Jan Harvey)
