BASF To Buy Cognis Next Week

(Reuters) – Chemical industry leader BASF (BASF.DE) has in principle agreed to acquire German additives maker Cognis [COGN.UL] and the deal could be announced as early as next week, several people familiar with the talks said.

BASF stands to pay slightly more than 3 billion euros ($4.03 billion) including debt for Cognis, controlled for the past nine years by buyout firms Permira [PERM.UL] and Goldman Sachs Capital Partners (GS.N), the sources said on Wednesday.

Permira, Goldman Sachs and BASF declined to comment.

Cognis’s Chief Financial Officer Marco Panichi, citing prevailing core earnings multiples in the industry, indicated last month that a fair value for Cognis could be about 3.4 billion euros, according to Reuters calculations.

Sources told Reuters on June 2 that haggling over liabilities was holding up an otherwise done deal between BASF and the private equity owners of Cognis.

Cognis makes additives for cosmetics and detergents and its specialty is using raw materials from palm trees, coconut and corn.

BASF Chief Executive Juergen Hambrecht, who will step down next year, is said to have negotiated particularly hard over the price for Cognis, having been accused of overpaying for BASF’s previous larger takeover of Ciba.

BASF shelled out 3.8 billion euros ($3.79 billion) including debt for the Swiss rival in a deal announced during the height of the financial crisis in September 2008.

(Reporting by Philipp Halstrick, Frank Siebelt and Ludwig Burger)