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Web Date: March 7, 2016

BASF considering bid for DuPont

An offer by the German firm could break up the Dow DuPont megamerger
Department: Science & Technology
Keywords: Mergers & acquisitions, BASF, Dow, Dupont

BASF is reportedly considering a bid for DuPont to rival the merger of equals that Dow Chemical and DuPont agreed to in December.

Read C&EN’s full coverage of the Dow-DuPont merger:
ACS members can also watch an archived version of a webinar with C&EN’s Alex Tullo on the future of R&D at DuPont.

According a Bloomberg report published on Friday March 4 and citing “people with knowledge of the matter,” the German chemical giant is working with investment banks to craft a potential offer. BASF, the article states, has made no formal approach to DuPont management.

DuPont and BASF representatives both say they will not comment on “rumors or speculation.”

Dow and DuPont announced their merger, worth $130 billion based on their combined stock prices, on Dec. 11. The companies plan to combine later this year, shed about $3 billion in costs, and then split into three separate firms involved in agriculture, polymers, and specialty chemicals.

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BASF may be working on a deal to get its hands on DuPont’s agriculture chemical business.
Credit: BASF
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BASF may be working on a deal to get its hands on DuPont’s agriculture chemical business.
Credit: BASF

Of the three, the agriculture company will feature the most integration between Dow and DuPont. In recent deal motivated by agriculture, last month, ChemChina agreed to purchase Swiss agricultural chemical and seed supplier Syngenta for $43 billion. Syngenta fended off a hostile bid from Monsanto last year.

BASF’s agriculture unit is smaller than Dow’s or DuPont’s, and unlike those of its rivals, it has no significant seed business.

BASF may have been in the hunt for DuPont’s agriculture business since last fall. According to a prospectus filed last week for the Dow-DuPont merger, DuPont CEO Ed Breen met in New Jersey on Nov. 25 with the chairman of a large, publicly traded chemical company. BASF is the only chemical company other than Dow with the wherewithal to purchase DuPont or its agriculture business.

In a meeting later that day, the unnamed chemical company’s representatives floated the idea of a cash purchase of DuPont’s agriculture businesses as well as other transactions.

On Dec. 10, the day before the Dow-DuPont deal was formally announced, the chairman of the unnamed chemical company wrote to Breen proposing that the two firms enter discussions for a “combination transaction.”

 
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