Oligopoly brief: BASF
German-based BASF is the world's #1 chemical company, outdistancing its chief competitors, DuPont, Bayer, and Dow. Long confined to Germany, it now has international scope, with over 100 plants worldwide. The company is active merger & acquisition mover, with a flow patter of acquisitions and deacquistions.
BASF originated in 1865 as a make of dyes. It was later (1925) acquired by conglomerate I.G. Farbenindustrie AG. BASF was relaunched as an independent firm after World War II, in 1952. Recent decades have sent the company drop some businesses (such as pharmaceuticals and printing inks) while growing in others (such as agriculture and plastics).
More than any other Western chemical company, BASF has a major Asian presence. That's especially true in China, where it is now the largest foreign investor, having built a major plant complex with Sinopec, a Chinese-government-controlled chemical and petrochemical company.
BASF has chosen to concentrate on five business segments:
- Basic Chemicals (solvents and catalysts, for example)
- Plastics
- Agricultural chemicals (food additives and fertilizers)
- So-called performative products (such as dyes, sealants, adhesives, and coatings)
- Petroleum exploration and refining (through its Wintershall AG subsidiary)
The company has two major deals pending that will increase its current lead in the chemical market. The first is a $5 billion unsolicited bid for Englehardt Corporation, a US-based, a leading manufacturer of catalysts and chemicals for surface finishing and a Fortune 500 company in its own right. This would be BASF's largest acquisition ever, and reportedly the biggest German buyout of an American firm.
BASF has also made a $3 billion bid for the construction chemicals division of Germany's Degussa AG. This division is a major player in the market for sealants, adhesives, and coatings used in building. It would strengthen BASF's already strong position in that industry.
The scope of these two bids, especially coming at once, indicates that BASF is flush with cash and it is eager to keep growing.
Some recent acquisitions
2005
- Bought the North American business of LATI Industria Termoplastici SpA, an Italian plastic manufacturer for an undisclosed sum.
- Bought the Coil Coating business of Germany company Rhenania Coatings GmbH.
- Acquired Leuna-Miramid GmbH, German manufacturer of industrial plastics.
- Acquired Swiss specialty chemicals company Orgamol S.A
- Acquired the toluene diisocyanate (TDI) division of US-based Hunstman.
- Acquired electronic chemicals business of Merck, making chemicals used in making silicon chips.
- Acquired the polyurethane systems business of the American Chemtura Corporation, which makes products for the footwear industry
- Acquired full ownership of BNC, its joint venture in the coating industry with Japanese firm NOF Corporation.
- Acquired the polyurethane activities of the Swedish firm Lagomat AB.
2004
- Acquired US-based Foam Enterprises Inc., a maker of rigid polyurethane foam materials.
- Acquired the CPG Technologies food preservation business from US-based Agway, Inc.
- Acquired some of the plastics business of Sunoco.
2003
- Acquired a range of crop protection products from German rival Bayer.
- Acquired the engineering plastics assets of Honeywell.
- Acquired Callery Chemical, a US firm that makes chemicals for the pharmaceutical industry.
2000
- Bought Japanese firm Takeda Chemical Industries Ltd., making BASF the world's #2 vitamin producer
- Acquired American Cyanimid, the crop protection system business of American Home Products Corp. (AHP), making BASF the #3 agricultural chemicals company worldwide.
Some recent sell-offs
2005
- BASF and Shell created a joint venture in the petrochemical segment named Basell in 2000. They sold it in 2005 to a private investment group.
- Austrian firm, W.C. Heraeus acquired BASF's ceramic decoration color business.
- Sold an insecticide business to US-firm American Vanguard.
- Sold a fungicide line to Japanese conglomerate Sumitomo.
- Sold its North American polystyrene business to UK-based Ineos Capital.
2004
- Sold its printing ink division to equity group CVC Capital.
2003
- Sold its nylon fibers business to Honeywell.
- Sold its agricultural soil fumigant business to Japanese firm Kanesho.
2002
- Sold its fire-retardant fiber business to US firm MLM.
2001
- US-based Abbott Laboratories acquired BASF's pharmaceuticals business.
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