BASF Announces Full Engelhard Integration
Thursday November 2, 8:00 am ET
- Annual synergies of euro 160 million ($200 million)
- Reduction of approximately 800 positions
- Catalysts division to be located in Iselin, New Jersey
- BASF's North American headquarters to remain in Florham Park, New Jersey
FLORHAM PARK, N.J., Nov. 2 /PRNewswire/ -- Following the acquisition of Engelhard Corporation on June 6, 2006, BASF today (November 2, 2006) announced the full integration of Engelhard into its global operations. BASF expects the integration to result in annual synergies of euro 160 million ($200 million) by 2010. Almost half of this amount will be achieved by 2007 and more than 80 percent by 2008. Contributing to the synergies will be a broader global reach, a stronger business presence in certain regions such as North America, and further extensions into key markets. The development positively enhances BASF's position as the supplier of choice to its customers through an innovative and more diversified product portfolio.
The integration will lead to a reduction of about 800 positions, the majority of which will be in the United States. The one-time cost associated with the integration of the former Engelhard business is estimated to be approximately euro 100 million ($120 million).
The Catalysts division and major related research activities will be located in Iselin, New Jersey, while BASF's headquarters in North America will remain in Florham Park, New Jersey.
"The integration allows us to achieve profitable growth by expanding and deepening our existing business relationships in key industries and markets," said Klaus Peter Lobbe, member of the Board of Executive Directors of BASF Aktiengesellschaft responsible for North America. "Our integration plan allows us to combine the strengths of all of our assets -- whether recently acquired or existing -- to ensure that they contribute to our long-term profitability. An important component of this plan is the creation of a team that is the best in the industry and which will play a key role in ensuring BASF's success going forward."
Central to the integration plan is the structure of the new Catalysts division led by Wayne T. Smith, which will merge BASF's existing chemical catalysts business with those catalysts businesses recently acquired. In addition, BASF will combine the respective research activities in its global technology platform.
"The joint research and development capabilities will truly be world class and will yield the innovative products and solutions that our customers expect," stated Smith. "This adds to an already broad catalyst product portfolio and significantly enhances our competitive advantage," he concluded.
The Appearance & Performance Technologies (APT) and Ventures businesses will be integrated into the existing BASF operating divisions of Fine Chemicals, Functional Polymers, Performance Chemicals, Agricultural Products, BASF Future Business, and Catalysts. By doing this, BASF will create growth opportunities for these operations by extending its regional capabilities through broader access to markets and customers, and by tapping into new, exciting business opportunities.
BASF will provide assistance for all employees who are laid off as a result of the integration plans. "Any job loss is difficult," said Mr. Lobbe, "but our principal objective is to ensure the sustained success of BASF. We will treat all affected employees fairly and try to ensure a smooth transition for them during the months ahead," he concluded.
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