25 February 2010 17:24 [Source: ICIS news]
LUDWIGSHAFEN (ICIS news)--BASF will not make any sizable acquisitions during 2010 until the integration of specialty chemical producer Ciba is fully completed, said Hans-Ulrich Engel, a member of the German chemical giant’s board of executive directors, on Thursday.
As BASF was still “intensely dealing” with the Ciba acquisition, which closed in April, it has put limitations on any other merger and acquisition activity, Engel said.
“First of all, our main priority is finishing the integration [of Ciba], and there is an awful lot of work still to be done during the year 2010,” said Engel, speaking on the sidelines of the company’s annual results announcement.
“Obviously as the biggest player in the chemical industry we are always looking at and evaluating possible investments,” he added.
“You always have to ask yourself the question: what kind of resources do you have available financially and what kind of management resources do you have to be making transactions?” Engel said.
“If a big part of your organisation is still dealing with integration work, it is rather difficult to again add something sizeable to the likes of Ciba,” he added.
Engel said that all the major structural integration measures with Ciba would be completed by April 2010 and that by the end of the year BASF expected the combined business to have made annual savings of at least €310m ($419m).
He added that as the integration process had been so rapid, the majority of the associated costs were incurred in 2009, totaling some €785m.
During the conference, BASF’s chairman Jurgen Hambrecht hinted that if new expansion was to happen, the company would focus on the growth of activities in Asia, both in manufacturing and in research and development.
Earlier on Thursday, BASF said it swung to a net profit of €455m in the fourth quarter of 2009 compared to a loss of €313m in the year-earlier period.
($1 = €0.74)Read Paul Hodges’ Chemicals and the Economy blog
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