BASF buys Cyanamid for $3.8bn
21 March 2000
BASF buys Cyanamid for $3.8bn
By FWi staff
GERMAN chemicals giant BASF has agreed to pay around US$3.8bn (2.4bn) for Cyanamid, the agrochemicals division of American Home Products.
BASF says the move will more than double its annual crop protection sales – around $1.9bn in 1999 – and make it one of the worlds leading crop protection manufacturers.
The purchase, which must be approval by governmental anti-trust authorities, is due to be completed by 1 July.
BASF believes the acquisition will boost attempts to expand its presence in North and South America.
It will also strengthen its product portfolio, including the addition of a proven line of insecticides.
Fifteen active ingredients under development are expected to be launched in 2006. BASF estimates combined peak annual sales of $2bn.
Combined sales for both agrochemical units in 1999 stood at $3.6bn and income from operations before restructuring was $450m.
Savings of $250m are expected to be made from the transaction, with approximately half of this to be achieved in the first full year after the acquisition.
BASF said it plans to invest $700m in research and development during the next 10 years.
“By combining the crop protection activities of BASF and AHP, we are further implementing our long-term strategy in this business area, which we expect will further improve our profitability,” said Dr Jurgen Strube, chairman of BASFs board of executive directors.
In 1996 BASF bought the North American corn herbicide business of Sandoz AG of Switzerland.
Two years later, it took a majority stake in Micro Flo, a supplier of generic products for the US crop protection market.
Last year, the company bought a 40% stake in Swedish-based seed supplier Svalof Weibull.
BASF, which employs 105,000 people, had sales of $29.5bn in 1999.
Earlier this month, BASF said it would not sell its pharmaceutical unit to fund strengthening of the biotech side of its agrochemicals business
Fellow German company Bayer was reported to have tendered a bid for Cyanamid, and US groups DuPont and Dow Chemical were also said to be interested.
Analysts see the sale of Cyanamid as an important step towards AHP finding a full merger partner.
Novartis and Pharmacia & Upjohn, which is merging with Monsanto, are linked with acquiring it.