BASF Said to Plan Sale of Photoinitiator Unit Amid Asset Sales

  • German chemical maker said to have hired advisers for sale
  • BASF CEO Bock is trimming product range as oil earnings fall

BASF SE plans to sell a unit supplying compounds for coatings used on plastics, wood and metals as Chief Executive Officer Kurt Bock prunes the wide range of products of the world’s largest chemical maker, according to people with knowledge of the situation.

The German company has hired advisers to help market its photoinitiators business, part of its dispersions and pigments unit, to potential bidders, the people said, who asked not to be identified because the plan isn’t public. A spokesman for BASF declined to comment.

BASF’s focus under Bock, who took the helm in 2011, has been on fine-tuning businesses and exiting peripheral areas, in contrast to the multi-billion-euro deals spearheaded by his predecessor Juergen Hambrecht. The merger of Dow Chemical Co. and DuPont Co. as well as China National Chemical Corp.’s purchase of agrochemical competitor Syngenta AG has turned the spotlight on BASF’s market position and acquisition strategy.

The chemical maker faces a bleaker outlook for earnings this year, which could lead Bock to look for more assets to sell, including its pigments unit, one of the people said. BASF’s oil-and-gas arm will likely be hurt by lower gas prices in western Europe this year, with earnings at the Wintershall division estimated to decline to 310 million euros from 1 billion euros, according to Sanford C. Bernstein analyst Jeremy Redenius.

Past acquisitions of Ciba Holding AG and Evonik Industries AG’s construction chemicals operations added a number of sub-scale businesses relative to BASF’s approximately 70 billion euros in annual revenue.

Bock said Feb. 26 that there weren’t plans to sell or find a joint venture partner for the pigments business. New management is “working very hard” to resolve weaknesses, he said. The company has said it plans to establish a separate legal entity for pigments in the second half of this year.

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