BASF INVITES FINAL PRIVATE EQUITY BIDS FOR CONSTRUCTION CHEMS UNIT

German
chemicals group BASF has asked the two remaining private-equity
suitors of its €3 billion construction chemicals unit for final bids by Friday,
three people close to the matter said.

A
consortium comprising buyout groups Cinven and Bain is expected to table an
offer, as is rival investor Lone Star, which is bidding alone, the three said.

The sale
has been long and drawn out as BASF put the construction chemicals
business on the block a year ago to focus on more profitable operations.

The
company declined to comment on Thursday. Cinven and Lone Star also would not
comment, while Bain had no immediate comment.

BASF’s CEO Martin
Brudermueller said last month he expects the signing of a deal before the end
of the year.

The
chemicals giant had initially hoped to sell the unit to the world’s largest
cement maker LafargeHolcim, but was unable to hammer out a deal.

Cinven
owns smaller French peer Chryso and aims to fold the business into the BASF unit,
if its bid prevails, the sources said.

Bain owns
British building materials distributor MKM, while Lone Star has German
building materials maker Xella in its portfolio.

Lone Star
had previously walked away from the bidding but was invited back to the
negotiating table. Still, the Cinven-Bain consortium is seen as the frontrunner
in the final round, the sources said.

BASF’s
construction chemicals unit is the world’s largest maker of additives for
concrete. It also offers a range of substances including concrete repair
fillers, grouts and sealants under a business dubbed Construction Systems,
where BASF is the No. 4 player globally.

Analysts
have said that BASF never managed to reconcile the construction
chemicals unit’s dependence on small to mid-size builders with BASF’s
focus on large industrial customers.

BASF purchased the construction chemicals business – which competes with Standard Industries, GCP Applied Technologies, Mapei, RPM Inc and Sika – from Degussa in 2006 for €2.7 billion including debt.https://www.euronews.com/2019/11/07/basf-invites-final-private-equity-bids-for-construction-chems-unit-sources