15 September 2008 12:43 [Source: ICIS news]
LONDON (ICIS news)--BASF's proposed Swfr6.1bn ($5.5bn, €3.9bn) acquisition of Switzerland-based Ciba Specialty Chemicals will enhance the German chemical giant's growth prospects and help reduce cyclicality, CEO Jurgen Hambrecht said on Monday.
"BASF will provide a long-term sustainable business for the [Ciba] business,” Hambrecht told a press conference in ?xml:namespace>
“We are opening up the door for profitable growth in attractive specialty businesses," he said. "[This] will make our sales more resilient, especially when it comes to earnings per share."
BASF plans to merge the Ciba plastics additives, coatings effects and water and paper treatment chemicals businesses into its performance products segment.
They will add about 7% to BASF’s sales, taking the 2007 pro forma figure to €62bn ($89bn).
BASF said it was committed to retaining the skills and experience of Ciba’s employees but Hambrecht would not comment on further restructuring plans for the Swiss group.
Significant parts of the joint businesses will remain in
BASF had been observing Ciba for some time, Hambrecht added.
Ciba chairman Armin Meyer said that his company had not been approached by any other suitors.
Giving up its independence was not easy, he added, but he admitted that the framework criteria for in specialty chemicals had changed significantly.
Ciba missed the critical size for is business units to be managed globally, Meyer said.
The company had been hit by high raw material and energy costs alongside the ongoing impact of customer and supplier consolidation and increasing competition for
The share price climbed more than 25% on Monday as the BASF bid offer was made public.
“BASF is a stable and long-term partner for us,” Meyer said “The combination is a win-win position for all shareholders,” he added.
Hambrecht called the Swfr50 a share offer, which represents a 32% premium over Ciba’s Friday’s closing price, BASF’s “last, last and final offer”.
BASF said it had committed to continue production at Ciba’s sites in Klybeck, Kaisten, Monthey and Schweizerhalle, for at least 18 months after closing the deal.
Ciba’s employees would see their compensation and benefit schemes maintained for 12 months and BASF had agreed to continue using the Ciba brand for specified products and activities.
($1 = Swfr1.11/€1 = Swfr1.60)
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