Ludwigshafen, Germany -- BASF SE plans to buy speciality chemical group Ciba Holding AG, of Basel, Switzerland, offering Ciba shareholders CHF 50 ($45) a share, in a deal worth CHF 6100 million.
The deal will strengthen BASF's portfolio and expand "our leadingposition in specialty chemicals … [in] a variety of customerindustries, in particular the plastics and coatings industries as wellas water treatment," said BASF chairman Dr Jürgen Hambrecht (pictured), in a 15 Sept BASF announcement.
Ciba's board supports the deal, which BASF said corresponds to a premium of 32 percent above the closing price for Ciba's shares on 12 Sept 2008 and a premium of 60 percent above the volume-weighted average share price for Ciba shares in the 30 days prior to announcement of the public takeover offer. BASF expects a positive contribution to earnings in the second year, said the BASF chairman.
Hambrecht pointed out that, in paper chemicals, the move will "intensify the urgently needed restructuring process," with the merged entity becoming "the leading supplier, with an extensive portfolio." He added that BASF recognises "the strength of broad areas of Ciba's portfolio, even if the company's performance has disappointed analysts and investors," especially in the second quarter of 2008.
Ciba has a leading market position, in particular in plastics additives and coating-effect materials, said Hambrecht, who feels "integration of Ciba's activities into BASF and the necessary further restructuring measures will give the businesses sustainable strength and offer them a long-term perspective for profitable growth."
"Against the backdrop of increasingly challenging conditions within our industry, this is a transaction which combines a fair price with an industrially compelling solution for Ciba," commented Ciba chairman Dr Armin Meyer, in the statement. "Ciba's businesses will be strengthened substantially" by integration into BASF, and access to BASF's research, production and marketing platform, he said, pointing out that this applies particularly in the plastics, coatings and paper divisions.