FRANKFURT (Reuters) -BASF has agreed to sell a majority stake in its coatings business to private equity firm Carlyle and the Qatar Investment Authority, valuing the unit at 7.7 billion euros ($8.91 billion).

In a joint statement, the companies said on Friday that BASF would retain a 40% stake in the coatings business and that it would also receive a pre-tax cash inflow of about 5.8 billion euros on completion of the transaction.

BASF put the coatings division up for sale at the start of the year, part of a wider strategy to focus on businesses that are closely integrated and physically connected within its major chemical plants across the globe.

BASF said that the transaction - when combined with the sale earlier this year of its decorative paints business to Sherwin-Williams ( SHW ) - values BASF's entire coatings division at an enterprise value including debt of 8.7 billion euros, or about 13 times 2024 earnings before interest, tax, depreciation and amortisation (EBITDA).

The chemical company started approaching the market in the second quarter to explore strategic options for its remaining coatings activities, and was targeting a decision in the last quarter of the year.

It has said proceeds from a potential divestment could enable an earlier start to a previously announced share buyback of at least 4 billion euros between 2027 and 2028.

($1 = 0.8642 euros)