BASF in talks to acquire Cognis in a potential €3 billion deal

BASF, the world's largest chemical company is in talks to acquire the debt-ridden Cognis, a maker of speciality chemicals owned by private equity firms Goldman Sachs Group Inc. and Permira Advisers Ltd, in a deal that commentators say may be valued approximately €3 billion ($4 billion).

Cognis, is a leading global supplier of innovative specialty chemicals and nutritional ingredients, with a particular focus on the areas of wellness and sustainability.

A former Henkel AG unit, Cognis was sold to the buyout firms in 2001.

If the deal materialises, it would become the second-biggest acquisition for the Ludwigshafen, Germany-based BASF, after acquiring Swiss rival Ciba for €3.8 billion in late 2008. (See: BASF plans to acquire Ciba Holding AG for approximately €3.8 billion)

The acquisition would enable BASF to reduce its dependance on plastics and chemicals made by Middle East competitors who produce them more cheaply.

reports say Lubrizol Corp. and DuPont Co could be expected to be interested in Cognis, which in a bid to pare down debt, hd earlier this month signed an agreement to sell its UV acrylates business, which manufactures and sells monomers and oligomers for UV applications marketed under the Photomer brand name, to IGM Resins BV, based in Waalwijk, The Netherlands, a global specialty chemicals manufacturer focusing on UV radiation curing markets.