BASF board said to have approved bid for Cognis

07 May 2010 16:48  [Source: ICIS news]

TORONTO (ICIS news)--BASF’s supervisory board has approved a bid worth around €3.0bn ($3.8bn) for specialty chemicals firm Cognis, paving the way for an official offer in coming days, a German business daily publication reported on Friday.

Financial Times Deutschland, citing “well-informed” but unnamed market sources, said BASF was likely to make a bid.

A Cognis spokeswoman told ICIS news her company could not comment, while BASF did not respond to a request for comment.

The article reported that the companies had been in talks over a deal in 2008, but BASF then decided to acquire Ciba.

Additionally, Cognis released its recent first-quarter results a month ahead of its usual schedule, an indication that talks about a sale were in a “serious phase”, the publication said.

However, the Cognis spokeswoman said that financial earnings had been "extremely good", which prompted Cognis to issue a preliminary report as soon as possible. 

Given the strong quarter - with results effectively improving 80% year on year - there had been consideration that Cognis may have been under a regulatory duty to issue the report as soon as possible, she added.

Cognis last week reported first-quarter sales of €728m, up 10.6% from the first quarter of 2009, as volumes across all its business sectors returned to pre-crisis levels.

There has been repeated speculation in past weeks about a possible sale of Cognis, with US firm Lubrizol also having been mentioned as a possible bidder.

Cognis is owned by a group of private equity firms advised by Permira and Goldman Sachs. It was once part of German soap, detergents and adhesives major Henkel, who sold it in 2001.

The acquisition of Cognis, if it goes through, would mark BASF’s largest since it bought Swiss specialty chemicals major Ciba in a deal valued at around €3.9bn that closed in April last year.

($1 = €0.79)

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By: Stefan Baumgarten
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