German chemical giant BASF said on June 23 it would buy German specialist chemical company Cognis for a total of 3.1 billion euros (US$3.8 billion). Its latest acquisition of a chemical specialist will help BASF focus on high-margin sectors such as personal care products and cosmetics as it diversifies away from core gas, oil, and plastics activities.
Cognis produces chemicals used in a broad range of products, from cosmetics to adhesives and lubricants. It has 5,500 employees and posted sales last year of 2.6 billion euros.
BASF said it had agreed terms of a sale with the owners of Cognis, investment fund Permira and Goldman Sachs, based on "an equity purchase price of 700 million euros.
BASF chairman Juergen Hambrecht said that the acquisition meant his group was "strengthening our portfolio with cyclically robust and profitable businesses and further expanding our position as the worlds leading chemical company." BASF added that the deal should help it become a major supplier of products based on renewable raw materials.
Cognis is BASF's biggest purchase since it bought the Swiss specialty chemical group Ciba last year for 3.8 billion euros.
BASF wants to finalize its purchase by the end of November, and expects integration costs of 200-250 million euros by the end of 2012. Overall annual savings of at least 130 million euros should be reached by 2013, the group added, without specifying if it planned major job cuts.
The deal should boost BASF sales, which would have reached 48.7 billion euros last year if Cognis' results were included.
Copyright Agence France-Presse, 2010
