Investor Alert

Sept. 15, 2008, 2:26 a.m. EDT

BASF to buy Ciba Specialty Chemicals for $5.5 billion

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By Martin Gelnar

ZURICH (MarketWatch) -- German chemical giant BASF SE (BASF.DE) Monday announced a friendly takeover offer of Swiss peer Ciba Holding AG at 50 Swiss francs a share in cash.

The transaction would create a leading chemicals company with sales of EUR62 billion based on 2007 accounts, with BASF accounting for more than 90% of the combined revenue. BASF has 95,000 employees and 100 major factories, Ciba has 13,000 employees and 60 sites.

Ciba's management supported the bid - which represents a 32% premium to Ciba's Friday closing price of CHF38 - saying the price is fair.

Including Ciba's debt and pension obligations, the transaction is worth CHF6.1 billion, or $5.5 billion, according to BASF.

BASF said that Ciba's home tome Basel and its surroundings would remain an important research and development center as well as production site for parts of the enlarged company. There was no mention of job cuts but BASF said some parts of the portfolio will be restructured.

There will certainly be job cuts in connection with the takeover of Ciba by BASF, but for now it can't be said how many jobs will be lost, a spokesman for the Swiss chemicals company said told Dow Jones Newswires.

Ciba already planned to cut around 1,200 jobs by the end of 2009, independent of the takeover. These cuts are part of a restructuring program announced earlier.

The offer period will run for a maximum of 30 working days from Oct. 1. The transaction is expected to close in the first quarter of 2009 at the latest following shareholder and regulatory approval.

At least two thirds of the shares have to be tendered for the offer to be valid. BASF also demands that some Ciba statutes designed as a defense against takeovers be abolished.

Company Web site: http://www.basf.com


-Contact: 201-938-5400

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