As The Carlyle Group, together with the Qatar Investment Authority (QIA), enters into a binding agreement to acquire BASF’s automotive OEM coatings, automotive refinish coatings, and surface treatment businesses, it faces a rare opportunity to help redefine manufacturing itself.

The €7.7 billion transaction, expected to close in Q2 2026, values BASF’s entire Coatings Division at approximately €8.7 billion, or about 13 times 2024 EV/EBITDA, and marks one of Europe’s most significant specialty-chemicals carve-outs in recent years. BASF will retain a 40 percent equity stake, highlighting its confidence in the business’s future and signaling a partnership focused on long-term value creation.

The global coatings industry, which has long relied on heat and fossil fuels, is approaching a turning point. Rising energy costs, fragile supply chains, and pressure for greater efficiency are forcing a long-overdue transformation.

BASF Coatings, with roughly €3.8 billion in annual revenue, occupies a central place in that story. Its products coat everything from cars and aircraft to furniture and packaging. Yet the methods used to cure those coatings have changed little for decades. Thermal curing, which bakes finishes in large gas ovens, remains the industry standard. It is reliable but slow, energy-intensive, and costly. In today’s economy, that model looks increasingly outdated.

UV and EB Technologies

Carlyle has a record of taking mature industrial businesses and finding new paths to growth. Its previous carve-outs of Axalta, Atotech, and Nouryon demonstrated how private capital can modernize complex operations and unlock innovation. A similar approach could be even more powerful here. By steering BASF Coatings toward ultraviolet (UV) and electron-beam (EB) curing technologies, Carlyle and QIA could help accelerate one of the most significant industrial transitions of this decade.

Unlike heat-based systems, UV and EB curing use photons or electrons to instantly harden coatings. The result is not a marginal gain but a fundamental shift in process economics. Curing, which once required minutes of heat, now takes seconds at room temperature. Energy use can decrease by as much as 80 percent while throughput and quality improve. The implications for cost, capacity, and competitiveness are enormous.

These technologies are already proving themselves in demanding markets. Automotive and electric-vehicle makers use rapid-curing coatings for lightweight composites and battery housings. Furniture and flooring producers rely on UV systems for durable finishes with minimal waste. Aerospace suppliers are testing solvent-free coatings for composites, and packaging firms are adopting UV and EB curing to enable the production of recyclable, mono-material films.

What unites these examples is not environmental idealism but industrial logic. When electricity is expensive and production space is limited, a process that delivers finished parts faster and with less energy becomes irresistible. The technology’s appeal is economic first and environmental second, which is what makes it scalable.

The potential rewards go beyond efficiency. A coatings business built around UV and EB curing could help redefine what a coatings company can be. Not just a producer of materials, but an enabler of smarter, faster, and more sustainable and reliable manufacturing.

By aligning with automation and digital production technologies, investing in advanced formulations, and expanding in North America and Asia where adoption is accelerating, Carlyle could position BASF Coatings as a global leader in low-energy, high-performance surface technologies. This evolution would move the business beyond cyclical volume markets toward steady growth driven by productivity, innovation, and design flexibility.

Europe’s manufacturing base has struggled since the energy shocks that followed Russia’s invasion of Ukraine. High input costs have forced several chemical companies to scale back or exit entirely. Shifting toward low-energy processes such as UV and EB curing would make production more resilient, helping plants remain competitive even when prices fluctuate. For investors, that resilience means steadier cash flow and more substantial long-term value.

No technology solves everything. UV and EB systems require specialized formulations and capital investment; however, these hurdles are modest compared to the ongoing costs of energy-intensive thermal lines. Many manufacturers are already making the change, drawn not by regulation but by economics. As adoption spreads, scale will bring further cost reductions and technical improvements, reinforcing the shift.

For Carlyle, this acquisition represents more than a financial transaction. It is a chance to demonstrate how private capital can catalyze industrial renewal. Investors today want stories about building smarter, more resilient businesses that thrive under new constraints. BASF Coatings could become that story in practice, a business that turns technology adoption into sustained growth.

The coatings industry often goes unnoticed, even though it touches nearly every manufactured product on earth. Yet the way coatings are made reflects a broader challenge for global manufacturing: how to produce more with less energy, time, and waste. Carlyle, QIA, and BASF have the financial strength and strategic experience to lead that change. By championing faster and more efficient curing processes, they can turn a mature division into a showcase of industrial innovation.

Private equity is often seen as short-term, mainly focused on cutting costs and generating quick returns. This deal offers a chance to show otherwise. By investing in technologies that boost production competitiveness and efficiency, Carlyle and its partners can prove that profitability and innovation can grow together. This would send a strong message to investors and policymakers that smart capital still plays a crucial role in shaping the future of industrial growth.

Manufacturing is transforming. The choice is simple: define the future, or let the future define you.