BASF Bags Smaller Peer Cognis for €3.1 Billion

Chemical industry leader BASF agreed to buy additives maker Cognis for €3.1 billion including debt, expanding into chemicals derived from crops and plants.

BASF will pay Cognis's private-equity owners Permira, Goldman Sachs Capital Partners an equity price of €700 million, it said on Wednesday.

BASF, the world's largest chemical maker, said the deal would probably close in November 2010.

"We are strengthening our portfolio with cyclically robust and profitable businesses and further expanding our position as the world's leading chemical company," said BASF Chief Executive Juergen Hambrecht, who will step down next year.

Sources told Reuters on June 9 that the deal was imminent.

Cognis, a maker of additives for cosmetics and detergents, has made a specialty of using raw materials from palm trees, coconut and corn. These products would sell well through BASF's existing marketing channels and a takeover would also be a timely bet on a recovery in consumer goods markets, analysts have said.

BASF's core chemicals and plastics business now relies on industries such as automotive and construction which had been buffeted particularly hard by the economic crisis. Sources told Reuters earlier this year that U.S. specialty chemicals maker Lubrizol and at least one other company had also been interested in Cognis but sources have recently said BASF had become a clear frontrunner in the auction.

(6/23/2010)