BASF rumored to be considering a DuPont bid

Ludwigshafen, Germany—BASF SE is reportedly considering an offer to purchase DuPont Co., according to Bloomberg, although most financial analysts believe any potential deal is a longshot given that DuPont has already agreed to a merger with Dow Chemical Co. (GM Dec. 14, 2015). Sources told Bloomberg that BASF has made no formal approach to DuPont and neither company confirmed that negotiations were underway, but BASF reportedly did engage in discussions with DuPont before the merger with Dow was announced on Dec. 11. BASF is the world’s largest chemical company but has no seed business, and trails Syngenta AG and Bayer AG as the third largest producer of crop protection chemicals. A merger with DuPont would enlarge its agricultural chemical offerings and make it the second-largest producer of seed, behind Monsanto Co. The merger stakes were reportedly upped for BASF when Syngenta announced on Feb. 3 (GM Feb. 5, p. 18) that it was being acquired by China National Chemical Corp. (ChemChina) in a transaction valued at more than US$43 billion (US$465 per ordinary share). Analysts say a BASF/DuPont combination would face significant regulatory hurdles, however, and DuPont would likely have to pay Dow a termination fee of $1.9 billion if it decides to back out of their merger deal. Sources say BASF may opt instead to pursue some segment of DowDupont Inc. after the merged company splits off its agriculture, specialty chemicals, and materials segments as planned. Dow and DuPont’s merger of equals is the largest deal ever in the chemical industry, creating the world’s largest agriculture business and the second-largest chemical company, after BASF.