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BASF reaches agreement to buy Degussa's construction chemicals business

By Tim Wright | March 1, 2006

BASF has reached an agreement with Degussa AG to acquire Degussa's construction chemicals business. The purchase price for equity is approximately €2.2 billion. As a result, the transaction value for BASF is €2.7 billion. The transaction is expected to close by the middle of 2006.

"Degussa's construction chemicals unit has an excellent position in the industry and offers BASF an attractive means of forward integration in its existing value chain in construction chemicals," said Dr. Andreas Kreimeyer, member of the board of executive directors of BASF, responsible for the performance products segment. "The acquisition allows us to tap into the growth potential of the construction chemicals market on a sustainable basis and will further expand our position in this high-yield industry."

In fiscal 2004, Degussa's construction chemicals division posted sales of approximately €1.8 billion and an EBIT of €201 million, with a global workforce of about 7,400 employees. The division markets about 40,000 products worldwide and is organized in two segments – Admixture Systems and Construction Systems.

The business units in the Admixture Systems segment offer products and system solutions for the concrete industry. Customers include manufacturers of ready-mix and precast concrete and concrete products as well as contractors engaged in paving, mining and underground construction.

The business units in the Construction Systems segment are active in the areas of building systems, flooring applications, coatings and façades and expansion joints. Customers include building trade businesses, fabricators, building contractors and dealers specializing in concrete and masonry renovation, waterproofing, sealing, adhesive systems, tile fixing, performance flooring, coatings and façades, exterior insulation and expansion joints.

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