Ludwigshafen, Germany
September 15, 2008
- Cash offer of CHF 50.00
per share provides attractive premium
- Ciba’s Board of Directors
supports offer
- BASF to expand its leading
position in specialty chemicals with additional products and
services
- Repositioning and
restructuring of paper chemicals operations to create
leading supplier with extensive portfolio
- Basel to remain an
important site for parts of the combined business
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.”
“Against the backdrop of increasingly challenging conditions
within our industry, this is a transaction which combines a fair
price with an industrially compelling solution for Ciba,” said
Dr. Armin Meyer, Chairman of the Board of Directors of Ciba.
“Ciba’s businesses will be strengthened substantially thanks to
integration into BASF’s Verbund and the access to BASF’s
research, production and marketing platform. This applies
particularly in the Plastics, Coatings and Paper divisions. BASF
is a long-standing customer and supplier of Ciba and
well-acquainted with our people and our business. The
acquisition of Ciba by BASF will provide a long-term perspective
for profitable growth of the Basel operations in particular and
our other businesses around the world.”
Clear advantages in global competition
“In the current consolidation phase in the chemical industry,
the acquisition of Ciba offers clear advantages in terms of
global competition,” said Hambrecht.
The merger of the activities of BASF and Ciba would extend
BASF’s leading position as a preferred supplier to the plastics
industry and make BASF 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. In the area of coating effect materials, the
combination of BASF and Ciba would offer an extensive range of
pigments, resins and additives.
Thanks to economies of scale and greater efficiency, the
resulting leading supplier of chemicals for the paper industry
would offer the broadest product portfolio in the industry and
with its global reach would provide customers with the best
range of products and services in a difficult market
environment. Extensive restructuring is necessary throughout the
entire paper value chain. By combining and repositioning the
paper chemicals businesses of BASF and Ciba, BASF would start
this urgently needed process with the aim of ensuring the
long-term profitability of these activities.
Stronger growth in the markets of the future
In addition, the planned acquisition would strengthen BASF’s
presence in fast-growing emerging countries and improve its
market position in important industries such as automotive,
packaging, construction, electronics and water purification.
Thanks to the integration in BASF’s Verbund, Ciba’s businesses
for attractive niche markets such as oil and mining would
benefit from wider market access and BASF’s extensive
application and product know-how. This would open up additional
growth opportunities. The two companies also complement each
other very well with regard to research and development.
Combining the specific application know-how of Ciba with BASF’s
strong R&D platform would make it possible to provide customers
worldwide even faster with better products and solutions.
Offer period expected to begin on October 1, 2008
BASF will today (September 15, 2008) publish the formal advance
notification in which the offer is officially announced and
which contains all the fundamental information on the planned
offer. The offer prospectus is scheduled to be published on
October 1, 2008. The offer is expected to begin with the
publication of the offer prospectus following the approval of
the offer by the Swiss Takeover Board and, subject to later
extension, will be valid for 20 trading days plus an obligatory
extension of 10 trading days in accordance with Swiss law. The
offer is subject to a number of conditions. These include the
tendering of at least 66.67 percent of all nominal shares,
approval by the relevant authorities, as well as the removal of
various takeover defenses in Ciba’s statutes. BASF expects to
finalize the transaction in the first quarter of 2009 at the
latest. The financing for the offer is in place.
Selected key data for BASF and Ciba (2007)
BASF
Sites: ~100 major sites
Employees: ~95,000
Sales: €57.9 billion
EBIT before special items: €7,614 million
EBITDA margin: 18.2 percent*
Ciba
Sites: ~60
Employees: ~13,000
Sales: €4.0 billion
EBIT before special items: €336 million
EBITDA margin: 13.9 percent*
* before special items
BASF is the world’s leading chemical company: The Chemical
Company. Its portfolio ranges from oil and gas to chemicals,
plastics, performance products, agricultural products and fine
chemicals. As a reliable partner BASF helps its customers in
virtually all industries to be more successful. With its
high-value products and intelligent solutions, BASF plays an
important role in finding answers to global challenges such as
climate protection, energy efficiency, nutrition and mobility.
BASF has more than 95,000 employees and posted sales of almost
€58 billion in 2007. BASF shares are traded on the stock
exchanges in Frankfurt (BAS), London (BFA) and Zurich (AN). |
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