BASF SE, the world’s largest chemical maker, plans to sell parts of its pharmaceuticals business worth 270 million euros ($306 million) including caffeine to focus on painkiller Ibuprofen and Omega-3.
The custom synthesis business, which tailor-makes drugs for customers, will be sold to Swiss pharmaceuticals business Siegfried Holding AG, Ludwigshafen, Germany-based BASF said in a statement on Thursday. Siegfried will also buy production of active ingredients used in nose sprays and stimulants. The move will affect about 850 workers, BASF said.
BASF said it will focus on its core expertise, keeping Ibuprofen, Omega-3 fatty acids and polyethylenglycol, where the company has a market-leading position. Chief Executive Officer Kurt Bock’s strategy is to slim down the breadth of BASF’s activities and focus on more profitable products.
“This step is in line with BASF’s strategy of actively managing its portfolio and it will further sharpen the focus of the performance products segment on growth and high margin core businesses,” board member Michael Heinz said in the statement.
The transaction, which is subject to approval by merger control authorities, includes the divestment of BASF’s production sites in Germany, Switzerland and France.
The shares fell 2.1 percent to 84.51 euros as of 10:51 a.m. in Frankfurt. The stock has gained 21 percent this year, valuing the company at 78 billion euros. The DAX Index is trading 15 percent higher in 2015.
BASF spent almost $1 billion on Norway’s Pronova BioPharma ASA in 2013, giving it access to a top-purity fatty acid used in blockbuster heart drugs such as GlaxoSmithKline Plc’s Lovaza. Later that year Philadelphia-based FMC Corp. bought a different Norwegian maker of Omega-3, called Epax.
Demand began to ebb that same year after reports challenged health claims of the fatty acid, leading FMC, BASF and Royal DSM NV to join forces in an industrywide advertising campaign.
BASF is still struggling with sales of Omega-3, saying in its annual report that more competitors entered the market for highly concentrated omega-3.