Market Updates

BASF Acquires Cognis in $3.8 Billion Deal

Arthi Gupta
23 Jun, 2010
New York City

    BASF announces an agreement with Cognis Holding Luxembourg S.

[R]6:00 PM Frankfurt - BASF announces an agreement with Cognis Holding Luxembourg S.à r.l. to purchase the specialty chemicals company Cognis for an equity purchase price of €700 million.[/R]

BASF SE, the German chemical company announced today that it has reached an agreement to acquire nutritional ingredients and specialty chemicals supplier Cognis GmbH for an equity purchase price of €700 million or $859 million. Including pension obligations and net financial debt, the total enterprise value of the transaction is €3.1 billion or $3.8 billion.

The transaction, which is subject to clearance by competent merger control authorities, is anticipated to close in November 2010.

Germany-based Cognis is owned by Cognis Holding Holding Luxembourg S.Ã r.l since November 2001.

Upon completion of the acquisition, Cognis will be integrated into the Performance Products division of BASF.

BASF claims that its performance products help customers to improve their products and processes, and provide special characteristics to various everyday products like diapers, paper, vitamins for food supplements, UV filters for sunscreen, plastic additives and products for water treatment, mining applications and for the oil, automotive and coatings industries

Cognis supplies raw materials for the pharmaceutical, food and beverage and dietary-supplement markets, as well as the cosmetics and cleaning-products industries.

""With this acquisition, we want to achieve a leading position in personal care ingredients, strengthen our leading position in value added products for home care and establish a strong position in health and nutrition products. By purchasing Cognis, we will in particular expand our portfolio with products based on renewable raw materials,"" said John Feldmann, member of the board of BASF and head of Performance Products segment.

Cognis generated sales of about €2.6 billion and earnings before interest, taxes, depreciation and amortization or EBITDA of €322 million in 2009.

BASF reported first-quarter net earnings in late April of €1.03 billion or €1.12 per share, up from €375 million or €0.41 per share last year. Sales for the quarter rose to €15.45 billion from €12.22 billion a year ago.

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