BASF considering bid for DuPont - report

Ludwigshafen, Germany – BASF SE is considering making a bid for DuPont Co., according to published reports.

If BASF makes an offer, it could scuttle the merger between DuPont and Dow Chemical Co. that was announced on 11 December.

Bloomberg first reported news of the BASF offer on 4 March, and London’s Financial Times followed with its own report. Both stories quote unnamed sources familiar with the matter.

Both the Bloomberg and the FT reports say BASF has not yet decided if it will bid for DuPont. But, according to the reports, Ludwigshafen, Germany-based BASF has hired advisers to explore a deal with Wilmington, Delaware-based DuPont.

The FT report said that BASF hired Deutsche Bank and Citigroup to assist with a deal.

BASF, DuPont and Dow have not commented on a BASF proposal, but DuPont and Dow did hint at the possibility in a 1 March prospectus for their proposed merger.

The prospectus gives sketchy details about several discussion between DuPont Chairman Edward Breen and the chairman of an unnamed rival chemical company, identified in the prospectus as “Company 2.” Bloomberg and the FT say “Company 2” is BASF, whose chairman is Kurt Bock.

According to the reports, DuPont was aware of the second company’s interest, but still decided to move ahead with the blockbuster “merger of equals” with Midland, Michigan-based Dow Chemical.

The DuPont-Dow merger is not finalised, but continues to move forward. This week the companies revealed, in the prospectus, that Dow CEO Andrew Liveris may receive a $52.8m (€48.1m) golden parachute when he leaves the company next year following the merger.

If either company backs out of the merger, the agreement calls for a $1.9bn (€1.7bn) break-up fee.

DuPont Performance Polymers includes nylon, acetal and polybutylene terephthalate resins, as well as thermoplastic elastomers and biopolymers. Packaging & Industrial Polymers includes polymer modifiers and additives and specialty resins used in adhesives, barriers, sealants and peelable lidding; as well as the DuPont Teijin Films business.

DuPont Teijin is North America’s fifth-largest film and sheet business, according to a recent Plastics News ranking, with estimated sales of almost $1.4bn (€1.27bn) in 2014.

Like DuPont, BASF, the world’s largest chemical company, has extensive global plastics operations. They include nylon, PBT and acetal resins and compounds; specialty engineering plastics including polysulfone and polyethersulfone ; styrenic copolymers and foams; and polyurethanes.