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BASF Bids for U.S. Chemical Firm

January 04, 2006|From Reuters

BASF has made a $4.9-billion hostile, all-cash offer for U.S. pigment and chemicals maker Engelhard Corp., aiming to become the world's leading producer of pollution control materials, the German chemicals company said Tuesday.

BASF said its $37-a-share offer -- nearly a 23% premium over Engelhard's Dec. 30 closing price -- was unlikely to meet any significant regulatory hurdles.

A bellwether for the industry and the world's top chemical company by sales, BASF said it had sufficient cash and financing flexibility to fund the acquisition.

However, BASF said Engelhard had a poison pill plan that could allow the company to block the acquisition.

By acquiring the Iselin, N.J., company, BASF would gain a leader in the growing area of catalysts used to cut car emissions and help chemical plants and refineries run more efficiently.

Engelhard notched sales of $3.3 billion during the first nine months of 2005 and has a strong research pipeline, BASF said, adding that tightening pollution standards and a booming energy market could make Engelhard products very lucrative.

"We view this market as being highly attractive, with significant growth potential," BASF Chief Executive Juergen Hambrecht said.

Shares of BASF rose $1.03 to $77.51.

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