Takeover poker between BASF and Evonik: Union boss Vassiliadis in a delicate situation

An explosive meeting is taking place in Singapore these days. It was actually quite harmless in planning. But sometimes circumstances change. And so Michael Vassiliadis, the chairman of the IGBCE union, who sits on the supervisory board of BASF and the board of trustees of the RAG Foundation, visits the interim chairman of Evonik in Singapore. The specialty chemicals company whose major shareholder is the RAG Foundation and which has received a takeover offer from Germany's largest chemical company, BASF.

BASF offered 10.3 billion euros in an initial offer for its Essen-based competitor. Evonik's board of directors promptly rejected the offer. But what is more important is how the RAG Foundation reacts to the takeover interest from Ludwigshafen. According to everyone involved, there are currently no official discussions.

In Singapore, however, it will be virtually impossible to ignore the issue. According to information from the F.A.Z., the delegation included: another member of the supervisory board of Evonik and the chairman of the corporate works council of BASF. Every year the IGBCE union goes on a trip with senior works council members from chemical and industrial groups such as Bayer, Clariant, Covestro and Lanxess. Or Evonik and BASF.

When the trip was planned, the takeover was not yet an issue – at least publicly. The IGBCE representatives also just wanted to meet Evonik's head of Asia, Claus Rettig. But he has now been promoted to deputy chairman of Evonik because long-time boss Christian Kullmann is out at least until the end of the year due to an operation. The trip was confirmed upon request from IGBCE circles, but also with reference to the long planning phase.

This is still tricky for Vassiliadis. Because the longest-serving chairman of a German union wears several hats in the takeover poker. The 62-year-old trade unionist has already registered as “conflicted” on the BASF supervisory board and will no longer be involved in the decision-making processes in the future. This is because Vassiliadis also holds the deputy chairmanship of the board of trustees of the RAG Foundation, which is Evonik's main shareholder with just over 43 percent of the shares.

According to information from the F.A.Z. There has not yet been an extraordinary meeting of the Board of Trustees; the next regular meeting would not take place until the end of November. It is quite possible that there will be a need for discussion beforehand in view of BASF's offer, even though the board led by Bernd Tönjes controls the foundation operationally.

However, paragraph twelve of the foundation's statutes states: "According to the statutes of the RAG Foundation, the decision on the amount of the investment assets according to Section 3 requires the approval of the board of trustees." And the stake in Evonik is one of the foundation's most important assets; last year the foundation received 252.5 million euros in Evonik dividends.

The purpose of the foundation is to finance the perpetual costs of hard coal mining in Saarland, the Ruhr area and in Ibbenbüren (Westphalia). These include polder measures to protect against flooding and pumping out groundwater from old coal mines to prevent houses from sinking. The foundation spent 309 million euros on this last year. The RAG Foundation manages assets of around 16 billion euros, has provisions of ten billion euros and has so far paid around two billion euros for perpetual costs.

The future of Evonik is highly political, as the board of trustees is made up of many officials. The Prime Ministers of Saarland and North Rhine-Westphalia are members, as are the Federal Finance Minister and the Federal Economics Minister - and the respective chairman of the Mining, Chemicals and Energy Industrial Union, a position that Vassiliadis has held since 2009. The trade unionist has been on the BASF supervisory board for more than twelve years.

As chairman of the union, he naturally has to be the strong voice of employees in Germany. The future of the chemical site is of course an issue in a takeover of this size, in which the largest company wants to swallow the second largest. The investments are currently taking place elsewhere; in this country, at most, money is being invested in maintenance. Both BASF and Evonik are cutting jobs in this country, shutting down plants and focusing on other markets. Synergies between companies usually mean cuts for employees.

Vassiliadis expressed himself accordingly after the takeover interest became known: A purchase of a successful company by another will not become a story of the future for locations and employees simply because the new entity will become larger, said the trade unionist. There must be future prospects and investment commitments for the employees of both companies. That doesn't sound really combative.

There are some voices, especially in North Rhine-Westphalia, that assume that the powerful trade unionist has another interest: that in addition to his roles as a supervisory board and board member, he is actually already working on his own future. And I have my eye on the chairman of the board of the RAG Foundation.

Of course, such rumors can also be sown to harm the trade unionist. Vassiliadis himself could not be reached for comment because he had just been to Israel before his trip to Singapore. He was elected to head the IGBCE five times in a row, and his current mandate runs until 2029. Bernd Tönjes, 70,'s contract ends in 2028.