(Bloomberg) -- BASF SE will sell its Brazilian paints unit to Sherwin-Williams Company for $1.15 billion, as part of the German company’s wider strategy to focus on its main chemicals, industrial and nutrition divisions. 

Suvinil is one of the main providers of architectural paints in Brazil and caters to professional painters, designers and contractors under the Suvinil and Glasu! brands. The business generated approximately $525 million in sales in 2024, according to a statement from Sherwin-Williams.

BASF shares rose as much as 1.1% before paring back most of the gains on Monday. The stock has gained around a fifth since the start of the year. Shares of Sherwin-Williams trade on the New York Stock Exchange, which is closed for a US holiday. 

BASF Chief Executive Officer Markus Kamieth, who took over in April, is in the process of streamlining the company’s operations to counter high energy prices and a decline in global demand, particularly in China. In September, Kamieth announced the company was preparing the agricultural unit for a possible listing, and said he intended to sell Suvinil.

As part of the strategic shift, BASF will focus on products produced at chemical plants in Germany, Belgium and China. Suvinil employs about 1,000 people and operates almost exclusively in Brazil with two facilities in the northeast and southeast of the country. It has few synergies with other areas of BASF. 

BASF said it intends to approach the market in the second quarter of 2025 to explore strategic options for its other coatings activities, including those for the automotive industry. 

Sherwin-Williams employs more than 64,000 people and sells products in more than 5,000 stores in the US, Canada, the Caribbean and Latin America. 

The company said it will finance the all-cash purchase of Suvinil through funds on hand, alongside existing and new debt. The purchase price reflects a low teens earnings before interest, tax, depreciation and amortization multiple after costs and anticipated synergies. 

(Updates with more context throughout.)

©2025 Bloomberg L.P.