BASF makes offer to acquire Ciba

The boards of each firm have reached a transaction agreement whereby BASF would pay $46.50 per share for Ciba.

BASF (Ludwigshafen, German) announced on Sept. 15 that it plans to acquire specialty chemical firm Ciba Holding AG (Basel, Switzerland) and will make a public takeover offer to Ciba’s shareholders. BASF will pay CHF 50.00 ($46.50) in cash for each nominal share in Ciba. BASF and Ciba have reached a transaction agreement in which the Board of Directors of Ciba supports BASF’s offer and recommends its acceptance to Ciba’s shareholders. The offer corresponds to a premium of 32 percent above the closing price for Ciba’s shares on Sept. 12, 2008 and a premium of 60 percent above the volume-weighted average share price for Ciba shares in the 30 days prior to announcement of the public takeover offer. Based on all outstanding Ciba shares and including all net financial liabilities and pension obligations, the enterprise value would be CHF 6.1 billion (approximately $5.7 billion).

“With the acquisition of Ciba, we are strengthening our portfolio and expanding our leading position in specialty chemicals with products and services for a variety of customer industries, in particular the plastics and coatings industries as well as water treatment. In paper chemicals, we will intensify the urgently needed restructuring process and become the leading supplier with an extensive portfolio. We will grow profitably in accordance with our clear and successful strategy. The transaction meets our acquisition criteria. We expect that it will make a positive contribution to earnings per share in the second year,” said Dr. Jürgen Hambrecht, chairman of the board of Executive Directors of BASF SE. “Our attractive cash offer gives Ciba shareholders the opportunity to realize the full value of their investment plus a high premium immediately,” he added.

The merger would extend BASF’s position as a supplier to the plastics industry and make it the second-largest supplier of coating effect materials. In the fast-growing and highly profitable market for plastics additives, BASF would expand its portfolio by gaining important product segments such as UV stabilizers and antioxidants.

BASF expects to finalize the transaction in the first quarter of 2009 at the latest. The financing for the offer is in place. BASF has about 100 sites, 95,000 employees and revenue of  €57.9 billion. Ciba has 60 sites, 13,000 employees, and revenue of €4.0 billion.