BASF To Acquire Cognis

After months of negotiations, BASF has reached an agreement to acquire Cognis in a deal valued approximately $3.8 billion. The acquisition, which is subject to clearance by the merger control authorities, is expected to close by November 2010.

“With the acquisition of Cognis, we are strengthening our portfolio with cyclically robust and profitable businesses and further expanding our position as the world’s leading chemical company,” said Dr. Jürgen Hambrecht, chairman of the board of executive directors of BASF SE.

In the deal, BASF SE will pay a purchasing price of €700 million to Cognis Holding Luxembourg S.à r.l., controlled by Permira Funds, GS Capital Partners and SV Life Sciences. Including net financial debt and pension obligations, the enterprise value of the transaction is €3.1 billion.

“With the support of our owners Permira Funds and CS Capital Partners, we have become a leading innovative supplier of specialty chemicals,” stated Dr. Antonio Trius, chief executive officer of Cognis in a press statement released by BASF. “In particular, our focus on wellness and sustainability and our expertise in renewable raw-material based products have been our main success factors. We are convinced that there are excellent opportunities through combining the strengths of Cognis and BASF.”

In a statement from Cognis, Trius added, “We also believe that Cognis’ excellent market position and clear focus on the trends wellness and sustainability, especially our green products, make a perfect strategic fit.”

Cognis will be integrated into BASF’s Performance Products segment, a unit that had sales of approximately $11.5 billion in 2009.