BASF to Buy Cognis in $3.8 Billion Deal
June 23, 2010
BASF announced it will acquire closely-held Cognis in a 3.1 billion euro ($3.8 billion) deal that will give the company a strong position in the health and nutrition business reports MarketWatch. BASF said it will pay €700 million to Goldman Sachs'' GS Capital Partners unit and private equity group Permira Funds. The rest of the deal''s value comprises debt and pensions obligations taken on by the chemicals group. Cognis'' core business is as a specialty chemicals supplier to the health and nutrition market as well as the cosmetics and detergents industries. In a presentation on the company''s Web site, BASF said the deal will take it from the No. 3 player in personal care ingredients to the top spot and that it expects the deal to lift earnings from 2012 onward. It added that integration costs will be between €200 million and €250 million, while longer-term cost savings will be at lest €130 million a year by 2013. The deal is expected to close by November at the latest and is subject to clearance by merger authorities. Cognis employs around 5,500 people and had sales of 2.6 billion euros in 2009.