16 December 2005 14:48 [Source: ICIS news]
LONDON (ICIS news)--BASF is planning to make a formal bid for Degussa's construction chemicals business, the German chemicals and energy giant said on Friday.
Degussa, the world's biggest producer of construction chemicals, said on Tuesday that it was evaluating a possible disposal of the business, which in 2004 reported annual sales of around Euro1.8bn ($2.13bn) and earnings before interest and taxes (EBIT) of Euro201m.
"Following a detailed review of the business case, BASF plans to make a concrete offer for Degussa's business," BASF said on Friday. "BASF wishes to start the review as quickly as possible."
It pointed out that the global construction chemicals market was valued at around Euro13bn ($15.4bn) and was growing at the rate of about 4% a year, with relatively stable margins and high potential for innovation.
"As market and technology leader and the largest supplier of construction chemical products, Degussa is an important global partner to the construction chemicals industry," said BASF board member Andreas Kreimeyer. "Together with our own activities, we can open up new growth potential. We are interested in the business because of its global reach, its presence in important growth markets, in particular North America and Asia, and because of the high level of knowledge and innovativeness of its employees."
BASF's construction chemicals business has sales of "some hundred million euros" a year, but is some way behind Degussa in the world league, a BASF spokesman said.
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