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BASF moves forward with Ciba deal, considers changes to Performance Chemicals unit

Polymers and additives manufacturer BASF (Ludwigshafen, Germany) has said it is taking further steps to optimize its structure in light of dwindling demand and the need for plant shutdowns [e-Weekly Nov. 28]. Despite the prognoses of a business downturn in 2009, the company expects to close the acquisition and integration of Ciba (Basel, Switzerland) by the end of next month if it gets antitrust authorities approval.

During the so-called “Discovery Phase” joint teams from both companies employees will analyze the acquired businesses and define positioning of the combined businesses as well as optimized organizational structure. This process is supposed to take two months following closing, with actual integration starting in the second half of the year.

BASF is also looking for alternatives for its leather and textile chemicals business units. Currently part of the Performance Chemicals division, the businesses includes some products for plastics processing, coatings resins, and in the future, Ciba’s plastics additives. “For several years, this business (leather and textile chemicals) has been characterized by low market growth and high competitive pressure,” says Hans W. Reiners, head of the Performance Chemicals division. “In order to improve competitiveness, BASF has implemented a series of restructuring and efficiency programs in past years. However, these measures have not been sufficient to ensure the long-term profitability of the business.”

The company is, much like measures it is taking for its styrenics businesses, planning further cost reductions as well as considering the options of forming a joint venture or complete sales of the businesses.—[email protected]

TAGS: Materials
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