BASF strengthens its plastics business
BASF Aktiengesellschaft announced on January 14, 2003, the signing of definitive agreements for two transactions with Honeywell International, Morris Township, N.J. BASF has agreed to acquire Honeywell's worldwide engineering plastics business. In a separate transaction, BASF has agreed to sell its worldwide nylon fibers business to Honeywell. Through these transactions, BASF will exit the fibers market and concentrate on its plastics business, which also includes styrenics, polyurethanes and nylon intermediates.
With the acquisition of the engineering plastics business, BASF will significantly enhance its position in this market and will be able to offer customers a wider range of products. Honeywell's engineering plastics business had sales of approximately $350 million in 2001. Together with BASF's engineering plastics and nylon intermediate activities, the combined businesses would have had pro-forma sales of almost $2 billion in 2001.
BASF is selling its nylon fibers business to ensure its long-term competitiveness as part of a larger entity. BASF's sales in this business were approximately $350 million in 2001.
BASF will pay Honeywell $170 million in cash and transfer all of BASF's global nylon fibers business at closing. BASF will receive from Honeywell $80 million within one year of the transaction's close. The two transactions are expected to close in the course of the first half of 2003, subject to regulatory approval in several jurisdictions.
Engineering Plastics Agreement
As a result of this transaction, BASF will enhance its position as a leading global supplier of engineering plastics. The agreement includes manufacturing facilities, research and development assets, and sales and technical service locations worldwide. The business being acquired includes about 500 Honeywell personnel.
BASF will acquire the global engineering plastics portfolio of Honeywell, which is primarily comprised of the product line Capron® nylon and alloys (polyamide). These products will complement BASF's engineering plastics portfolio of Ultradur® thermoplastic polyester (PBT), Ultraform® acetal copolymer (POM), Ultrason®E polyethersulfone (PES) and Ultrason®S polysulfone (PSU), and Ultramid® nylon-based engineering plastics.
The acquisition will enhance BASF's product offerings to customers, particularly in the automotive, packaging and electrical & electronics industries. New markets and applications will be opened up to BASF from Honeywell's top products and excellent customer relationships developed over the past 40 years.
Nylon Fibers Agreement
BASF's nylon fibers business being sold includes the nylon 6 carpet fiber business which serves the commercial, automotive and residential markets; textile products including a diversified line of nylon yarns for apparel fabrics and nylon for automotive headliner fabrics, as well as solution dyed Zeftron® 200 nylon for upholstery fabrics.
The transaction includes fiber manufacturing plants, research facilities and sales offices in North America as well as BASF Hua Yuan Nylon (BHYN) Company Limited, located in Shanghai, China. The current businesses employ approximately 1,600 BASF personnel.
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