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BASF Clears Final Approvals on Cognis Deal

Thursday, December 2, 2010

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The European Union and Chinese authorities have both approved BASF SE’s acquisition of Cognis Holding GmbH, clearing the way for the transaction to close within days.

BASF must divest several businesses as part of the deal, which has now been approved by all relevant competition authorities. China and the EU signed off Tuesday (Nov. 30) on the transaction, which is expected to be finalized by mid-December.

Antonio Trius

The EU’s approval is subject to the divestiture of these businesses and assets, located at Cognis’ site in Hythe, England:

• The Cognis hydroxy methacrylates business;

• The Cognis multifunctional methacrylates (MFM) and adducts business; and

• Plants for the manufacture of polyalkylene glycols (PAG) and PAG-based lubricants.

BASF will retain the latter business, including the customer base and intellectual property rights, and will receive PAG and PAG-based lubricants manufactured at Hythe through a toll manufacturing agreement. BASF will grant a license for the manufacture of these products to the purchaser of the plants.

The businesses account for sales of significantly less than €100 million (about $132 million US), which is less than 3% of Cognis’ total sales.

$924M Deal

In June, BASF announced that it had reached an agreement with Cognis Holding Luxembourg S.à r.l.—controlled by Permira Funds, GS Capital Partners and SV Life Sciences—to acquire the specialty chemicals company Cognis for an equity purchase price of €700 million (about $924.2 million US).

Including net financial debt and pension obligations, the enterprise value of the transaction is €3.1 billion (about $4 billion US).
 
Cognis Posts Gains

On Nov. 25, Cognis reported an 18.2% increase in sales for the first three quarters of 2010, compared with the same period in 2009.  The company reported a net profit of €184 million (about $243 million US).

The company’s Functional Products business achieved sales of €731 million euros (about $966 million US), a 23.7% rise compared to the first nine months of 2009.

"Due to the excellent performance of the first nine months of 2010, we expect to achieve a record full-year result," said Cognis CEO Antonio Trius.

Earlier this week, BASF announced that it was establishing a joint venture with UK-based INEOS Industries Holdings Ltd. to form a global styrenics company called Styrolution

Dr. Martin Brudermüller

BASF is the world’s leading chemical company, with sales of more than €50 billion (about $66 billion US) and about 105,000 employees at the end of 2009.

   

Tagged categories: Acquisitions; BASF; Cognis; Mergers

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