BASF makes offer to acquire Ciba Holding AG

15 Sep '08

6 min read

BASF [BAS, BFA, AN] plans to acquire Ciba Holding AG, Basel, Switzerland, [CIBN], a leading specialty chemical company, and will make a public takeover offer to Ciba's shareholders. BASF will pay CHF 50.00 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 attractive 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 September 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 €3.8 billion).

Convincing strategic logic:
“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.

“We recognize the strength of broad areas of Ciba's portfolio, even if the company's performance has disappointed analysts and investors, especially in the second quarter of 2008. Ciba has a leading market position, in particular with its portfolio of plastics additives and coating effect materials, and offers its customers significant benefits,“ continued Hambrecht.

“The integration of Ciba's activities into BASF and the necessary further restructuring measures will give the businesses sustainable strength and offer them a long-term perspective for profitable growth. The precondition for this is to rigorously improve operational excellence.“

Hambrecht stressed: “We look forward to working with Ciba's highly committed executives and employees. We offer the company and its employees a new home with a long-term, viable perspective. Basel will remain an important site for parts of the combined business, in particular research, and we will establish a global operating division there. We are convinced that there is a good match between the cultures and traditions of our two companies. BASF plus Ciba is a recipe for both consolidation and profitable growth.”

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