BASF Close to EUR3 Billion Cognis Acquisition

BASF clinched the purchase of Monheim, Germany-based Cognis, after Goldman Sachs Group Inc. and Permira Advisers LLP spurned an offer valued at as much as 3.3 billion euros from Lubrizol Corp, accoridng to people close to the discussions.

22 Jun 2010 --- BASF SE, the world’s largest chemicals maker, is close to announcing the purchase of smaller chemical company Cognis GmbH for at least 3.1 billion euros ($3.9 billion), two people with knowledge of the discussions have said.

BASF clinched the purchase of Monheim, Germany-based Cognis, after Goldman Sachs Group Inc. and Permira Advisers LLP spurned an offer valued at as much as 3.3 billion euros from Lubrizol Corp., said the people, who spoke on condition of anonymity because the discussions aren’t public, Bloomberg reported.

Earlier this month, The Financial Times Deutschland reported that BASF and Cognis’s private equity owners, Permira and Goldman Sachs Capital Partners, had agreed terms on the price and the main conditions of a takeover deal.

But The Journal said BASF clinched the deal this weekend after Goldman and Permira rejected a higher bid for the specialty chemicals maker from Lubrizol. While the deal is likely to be announced this week, there is still a chance the deal could fall apart, according to the newspaper.

BASF, based in Ludwigshafen, Germany, would gain specialty chemicals used in cosmetics and personal care products that are growing faster its than low-margin petrochemical products. BASF, whose chief executive officer Juergen Hambrecht plans to step down next year, spent more than two months working on the deal, which would be among the biggest in the industry this year.

Cognis drew bidders with its ingredients for body lotions and shampoos based on natural resources such as palm kernels and coconut oil, as opposed to synthetic materials, tapping demand for environmentally friendly products. The former Henkel AG unit was sold to Goldman and Permira in 2001.