29 October 2009 15:58 [Source: ICIS news]
LONDON (ICIS news)--BASF expects to be generating cost savings of at least €450m ($662m) per year from its acquisition of Ciba by the end of 2012, but the total cost of integration is to be €50m higher at €1.1bn, the company said on Thursday.
Annual savings of at least €350m per year are expected by the end of 2010, CEO Jurgen Hambrecht said in a conference call following the release of the chemical major's third-quarter results.
The savings and final expected integration costs are both €50m higher than the respective forecasts made in the second quarter.
Faster progress on redundancies and plant and site closures were being made, the company added.
BASF said it is looking into its options for 23 of 55 former Ciba production sites and expects to make final decisions on them by March 2010. It expects 32 of the production sites to be retained within BASF but to be restructured.
The closure of 33 non-production-relevant sites belonging to the former Basel-based specialty chemicals producer, out of a total of 56 planned closures, is exepcted by the end of this year, the company said.
The integration will involve the loss of 3,800 jobs by the end of next year, Hambrecht said.
“Three of the seven conditions for divestitures imposed by the merger control authorities have been fulfilled, and our goal is to complete the remaining divestitures by December this year,” he added.
BASF will take €800m of the total expected integration costs this year, charging €150m in cash and approximately €700m in special items.
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|
Asian Chemical Connections