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BASF bids on Ciba

BASF (Ludwigshafen, Germany) announced plans to acquire additives and chemicals supplier Ciba Holding AG (Ciba; Basel, Switzerland) in a proposed move to combine leading resin and additives supply positions in a market that’s seen a series of transformative mergers and acquisitions. Ciba’s board already approved the takeover, with BASF bidding CHF 50.00 per share, a 32% premium to the share price before the bid. With liabilities and other obligations, BASF’s investment would approach euro 3.8 billion.

BASF (Ludwigshafen, Germany) announced plans to acquire additives and chemicals supplier Ciba Holding AG (Ciba; Basel, Switzerland) in a proposed move to combine leading resin and additives supply positions in a market that’s seen a series of transformative mergers and acquisitions. Ciba’s board already approved the takeover, with BASF bidding CHF 50.00 per share, a 32% premium to the share price before the bid. With liabilities and other obligations, BASF’s investment would approach euro 3.8 billion. BASF expects to finalize the transaction in the first quarter of 2009 at the latest. On Sept. 16, The Wall Street Journal reported that Spanish fund manager, Bestinver, which owns a 13.2% stake in Ciba worth CHF 424.3 million, called for a higher offer price.
BASF executives say the acquisition would give them even better leverage in the plastics market, as it adds Ciba’s broad array of additives to the BASF polymer portfolio. BASF sees synergies in other end-use markets as well, including chemicals for paper manufacturing, and in coatings for plastics, metals, and other materials. The purchase would make BASF the second-largest supplier of effect coatings, including increasingly popular metallic effects. On the additives front, Ciba would bring UV stabilizers and antioxidants to BASF’s portfolio. BASF has annual sales of about euro 57.9 billion, while Ciba’s sales are at euro 4.0 billion.
Ciba’s stock price jumped early this month by about 10% on rumors of a merger with rival additives supplier Clariant. At the same time, there was speculation that plastics and chemicals suppliers such as BASF, SABIC, or another large strategic investor might move on Ciba, with BASF ultimately pulling the trigger.
BASF’s bid on Ciba is the most recent move of a rather acquisitive last few years at the firm, including its 2006 buy of Johnson Polymers and Engelhard. Earlier this year Dow Chemicals acquired Rohm & Haas, and last year Basell closed on Lyondell in a merger of giant plastics/chemicals suppliers, while SABIC picked up the former GE Plastics. 
 

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