01 October 2008 16:41 [Source: ICIS news]
FRANKFURT (ICIS news)--BASF's takeover of ?xml:namespace>
Yet with the global finance horizon darkening, who now will be able to buy and who will have to sell? With credit harder to obtain, new private equity deals will be few and far between.
This also begs the question of what will happen to companies already in investors’ hands.
With private equity’s profile reduced, the chemical merger and acquisition market could see more strategic deals. Apart from BASF, other companies have cash and acceptable credit ratings.
And as acquisition prices fall, some will seize the opportunity to bolster portfolios for the lean years ahead.
After selling or restructuring most of Bayer’s “dowry,”
Alternatively, LANXESS itself could be bought, although CEO Axel Heitmann has advised those seeking quick profits to think twice.
It is suggested that BASF has a “master plan” for acquisitions, and while rejecting the “master” label – possibly because it sounds too onerous – CEO Jurgen Hambrecht has repeatedly said he will play an active role in market consolidation.
First, however, he has to sell the styrenics business, for which there seem to be no takers.
Also, with the world’s biggest chemical company growing bigger by the day, some in
Speculation that BASF is now eyeing Swiss firm Clariant should be taken with a pinch of salt – besides, it will have enough to do in
The idea of BASF pursuing
After “proud Ciba” – as board chairman Armin Meyer wistfully called it – was sold to the Germans, the disappearance of another Swiss name might be too painful for the national psyche, so alternative scenarios may be drafted.
Sagging profits aside, Clariant’s ditching of its sixth chief executive – the Swede Jan Secher – since its spinoff from Sandoz in 1995 suggests unresolved issues.
Like Ciba’s, its specialties portfolio, including many aging former Hoechst businesses, is weighted towards products that can be manufactured cheaper elsewhere.
After betting on an outsider last time, Clariant’s board of directors has chosen its third former Hoechst manager, Hariolf Kottmann, to accelerate restructuring.
Swiss reports say that new board chairman Jurg Witmer, in particular, was dissatisfied with Secher’s pace.
Former Hoechst managers who have worked with Kottmann say he may be just the one to finish the job.
“He’s not a hatchet man, just determined,” said one.
Kottmann is rumoured to have an option to return to
It is said that his current job may be splitting Clariant in two, keeping Masterbatches, which manufactures colour and additive concentrates, and technical compounds for the plastics industry, where it is world market leader, and functional chemicals.
LANXESS is reportedly interested in the leather activities.
CEO Antonio Trius has enjoyed some success in shedding low-priced shackles such as oils and fats, although plans for a stock market debut have been ditched and the company’s private equity owners may need cash.
Analysts also see Altana’s family-owned chemicals business as too small.
After INEOS’ recent buying spree, it will certainly need to consolidate its funding as well as its aging production facilities.
LyondellBasell, apparently the only company to want BASF’s styrenics, is believed to have found it hard to come up with enough cash to pacify those in
Yes, the Ciba-BASF deal faces opposition from hedge funds, but with Hambrecht in his newfound role as a wheeler-dealer following the 2006 Engelhard coup there seems little danger of a collapse. The four-week BASF offer period to Ciab shareholders started on Wednesday.
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|