Cognis May Be In Play

Cognis, the former Henkel unit that makes personal care ingredients and other specialty chemicals, seems to be lining up potential buyers. The company is currently owned by a consortium of venture capital firms led by Permira, Goldman Sachs, and SV Life Sciences. Some rumors are better than others. And people do plant rumors to try to move prices of securities or for other reasons. However, when real news outlets publish articles based comments from connected sources—albeit off the record—something may really be happening behind the scenes. A Bloomberg article published last Friday, citing “two people with knowledge of the situation”, said BASF is preparing a $4 billion bid for Cognis and that a “U.S. bidder is interested in the business.” An analyst quoted in the article speculated that the bidder was Lubrizol. “Two people close to the negotiations” told Reuters in another article that Cognis was in talks with BASF and other parties. Finally, earlier today in the Financial Times, according to “people close to the situation”, Lubrizol made an offer to buy Cognis. Plausibility makes this a pretty good rumor, too. Cognis has been an acquisition target for years. And BASF is always in the mood for a little wheeling and dealing. It acquired Engelhard and Ciba recently and was supposedly in the hunt for Rohm and Haas before Dow won that bidding. Lubrizol, which purchased Noveon in 2004, is still looking for acquisitions. At a conference call in February, Lubrizol CEO James Hambrick took a question about whether he was planning a large purchase. “We really do need to build out our personal care business, our coatings business, and our engineered materials business,” he answered. “It’s hard to find a bolt-on that covers all three areas in the form of a large acquisition. So, by definition, we are looking at specific targets in those areas.” Taking calls from BASF chairman Jürgen Hambrecht and Lubrizol’s Hambrick in the same week must make for amusing telephone mix-ups at Cognis.

Author: Alex Tullo

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  1. Is BASF The Only Suitor Standing For Cognis? | The Chemical Notebook - [...] recently discussed published reports indicating that Lubrizol and BASF were eying Cognis, the private equity owned former specialty chemicals…