BASF's shift to specialties continues with bid for Ciba.(top of the week)(Ciba Specialty Chemicals Corp.)

BASF plans to buy Ciba Specialty Chemicals in the latest M&A deal of a rapidly consolidating specialties market. BASF has made a SF50/share cash offer to Ciba's shareholders, which values Ciba at SF3.4 billion ($3 billion) or SF6.1 billion including debt and pensions. The two companies have signed a transaction agreement, and Ciba's board has recommended the offer to its shareholders.

The merged company would have pro forma sales of almost 62 billion [euro]/year ($87.9 billion), as well as 160 major sites and 108,000 employees. BASF expects to finalize the transaction in the first quarter of 2009 at the latest and says that financing for the deal is in place. The company expects the acquisition to make a positive contribution to earnings per share in the second year.

BASF's offer corresponds to a premium of 32% over Ciba's closing share price on September 12, the last trading day before the offer was announced, and a 60% premium above Ciba's volume-weighted …