Personal Care Insights reported on 29 September 2026 that BASF has confirmed exploratory talks to acquire Evonik. Source: https://www.personalcareinsights.com/news/basf-evonik-takeover-talks.html.
The reported terms: an opening offer of €22.15 per share, valuing Evonik's equity at €10.3bn and the enterprise at €14.2bn, roughly a 29% premium to the share price. Evonik reportedly rejected it as too low. RAG-Stiftung holds 44% of Evonik. BASF shares fell 3.6% after the announcement and Evonik shares rose from €18.07 to €19.84, around 10%. BASF 2025 revenue was €59.7bn.
Both companies are major suppliers of the materials that make up cosmetic formulations: actives, emollients, surfactants, the functional ingredients that sit between water and the hero claim on your packaging.
Most founders reading this have never bought anything from either. That is exactly why it is worth understanding.
The supply chain you did not choose
A brand at £500k to £5m typically works with a contract manufacturer. You brief a product, they develop or adapt a formula, they source the raw materials, they produce it, you sell it.
The sourcing step is almost entirely invisible to you. You see a formula, a cost per unit and a lead time. You do not see which supplier provides the emulsifier, where the surfactant comes from, or whether the active in your hero product has one credible source or six.
That invisibility is fine while the upstream market is stable. It stops being fine when it consolidates, because the effects arrive at your end disguised as something else.
How upstream consolidation actually reaches you
Rarely as an announcement. Usually as one of four things, none of which comes with an explanation.
A price increase from your manufacturer, presented as general input cost inflation.
A lead time that gets longer, with the reason given as supplier allocation.
A reformulation request, where your manufacturer proposes a substitution for an ingredient they describe as difficult to source, and asks you to approve it.
Or a minimum order quantity that goes up, because your manufacturer is now buying a material in larger lots to secure supply.
That fourth one is the most damaging for a small brand and the least likely to be connected to its cause. A higher minimum on a raw material becomes a higher minimum on your production run, which becomes a larger inventory commitment, which becomes a cash problem a year later.
The question worth asking now
One question, in writing, to your contract manufacturer: which ingredients in our formulas are single-sourced, and from whom.
You are not asking them to change anything, and it is worth saying so when you ask, because the question can otherwise read as the opening of a difficult conversation. You are establishing where the concentration risk sits in products you depend on.
Three outcomes are possible. They answer clearly, which tells you what you need and tells you something good about the relationship. They answer vaguely, which is itself informative. Or they decline, which tells you that a supply problem will reach you as a surprise.
For any ingredient that turns out to be single-sourced and genuinely important to a hero product, the follow-up question is whether a qualified alternative exists and what it would take to validate it. Not to do it now. To know how long it would take if you had to.
Why reformulation is the real cost
The reason this matters more in beauty than in many categories is that substituting a raw material is not a procurement decision. It is a product decision with a regulatory tail.
Change an emulsifier and the texture moves. Change an active's supplier and the specification may differ enough to affect your claim. Any meaningful change potentially means new stability testing, a revised safety assessment, updated documentation in every market you sell in, and possibly an ingredient list change on pack, which means artwork and a print run.
For a brand with a handful of SKUs in two markets that is an expensive quarter. For one with a wide range across several markets it is considerably worse, which connects directly to why range width carries costs that do not appear in a gross margin calculation.
What not to do
Do not try to vertically integrate or source raw materials yourself. At this size you have neither the volume nor the technical function, and attempting it is a distraction that costs more than the risk.
Do not switch manufacturers on the basis of a deal that has not happened. These talks are early, Evonik has reportedly rejected the opening offer, and large chemical mergers attract regulatory scrutiny that can take years and sometimes end in nothing.
And do not assume this is only a large-company problem because the numbers are large. The whole point of a contract manufacturing model is that upstream economics pass through to you. You simply receive them later and without a label.
The plain version
Two of the biggest suppliers of what is in your products are discussing becoming one, and your exposure runs through a manufacturer who has never told you which of them they buy from.
One email establishes where you stand. It is the cheapest piece of supply chain work available to you, and it is worth doing while the question is hypothetical rather than urgent.