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BASF Removes Acquisition Barrier as Cognis Is Integrated

BASF SE, the world’s largest chemical manufacturer, may resume bigger acquisitions after completing the integration of cosmetics-ingredient maker Cognis that the company had cited as hampering further major purchases.

Cognis’s operations were fully brought into BASF’s by the end of January and teams working on the project have disbanded, Ulrich Boettger, global integration manager, said in an internal newspaper. Chief Executive Officer Kurt Bock has said repeatedly in the past year that Ludwigshafen, Germany-based BASF’s work to integrate Cognis would probably forestall a “larger” purchase.

“They have made an acquisition approximately every two years, so it wouldn’t be surprising if they made another soon,” said Heiko Feber, an analyst at Bankhaus Lampe KG with a “buy” recommendation on the stock. “I doubt it will happen immediately with the current economic environment in Europe, but I wouldn’t rule out their becoming active if something interesting comes along.”

Bock’s predecessor, Juergen Hambrecht, spent more than 18 billion euros ($23.7 billion) on purchases during an eight-year term that ended when he retired in May 2011. BASF may be interested in an acquisition that adds enzyme technology, Bock said in November.

BASF bought Monheim, Germany-based Cognis in December 2010 for 3.1 billion euros, and expects the combination to add 290 million euros to earnings before interest and taxes. The company raised its sales target for the end of the decade by 28 percent on Nov. 29 to 115 billion euros as emerging markets drive growth.

The manufacturer has generally made “a medium-sized investment” of 3 billion euros to 5 billion euros every two to three years, which is “compatible with our financial profile” and with the capacity to absorb new businesses, Bock said at the time. BASF hasn’t budgeted for a major purchase, he said.

Jennifer Moore-Braun, a BASF spokeswoman, declined to comment today beyond referring to Bock’s comments in November.

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