Reports: BASF Mulls Takeover Bid For DuPont

(RTTNews) - German chemical giant BASF SE (BFA.L, BASFY.PK) is reportedly considering making a takeover bid for peer EI DuPont De Nemours & Co. (DD) or DuPont, according to media reports. DuPont, in December 2015, agreed to a merger with Dow Chemical Co. (DOW).

BASF, the world's biggest chemicals company, has reportedly been working with advisors since last year to consider a bid for DuPont, but has not yet made a formal offer. However, shares of BASF are down more than 1 percent in Frankfurt on Monday amid concerns that a bidding war for DuPont could turn expensive for BASF.

BASF, in late February, reported a sharp decline in its fiscal 2015 profit reflecting weak sales performance due to sharply lower oil prices.

An acquisition of DuPont will provide BASF with more profitable businesses such as food ingredients and enzymes as well as the world's second-biggest producer of seeds such as genetically-modified corn. DuPont is the world's second largest seed company after Monsanto Co. (MON).

In early December, DuPont and Dow Chemical said their boards of directors have unanimously approved an agreement for an all-stock merger of equals. The combined company, with about $130 billion of market capitalization, will be named DowDuPont.

Initially, DuPont and Dow will merge their agriculture, material science and specialty products businesses and subsequently pursue a tax-free spin-off into three independent, publicly traded companies in 18 to 24 months after closing of the merger.

However, if either DuPont or Dow walk away from the merger, they will be required to a pay a break-up fee of about $1.9 billion.

In February, Switzerland-based crop chemicals firm Syngenta AG (SYT) said that China's state-owned China National Chemical Co. has offered to acquire the company for over $43 billion in cash. The deal is the biggest-ever acquisition by a Chinese company.

In Frankfurt, BASF's shares are down 0.63 euros or 1.00 percent to 62.65 euros.