BASF evaluates rival bid to break Dow/DuPont merger

Reports have surfaced from ‘people with knowledge of the matter’ that BASF could be looking to upset the $110bn merger of DuPont and Dow by making a bid for DuPont

According to Bloomberg Business BASF is working with advisers and financing banks to examine the merits of making a counter bid for the chemical company, although has not made a definitive decision.

Dow and DuPont agreed in December to a multipart transaction in which they would combine, cut costs and then split into three listed companies. The companies’ nearly equal market values and overlapping shareholders allowed them to structure the deal in a way that should avoid taxes on capital gains — a feat that BASF could struggle to match, according to The New York Times.

Derailing the merger would probably require BASF to offer a significant premium for DuPont — after covering the $1.9bn breakup fee and any tax savings the Dow deal would have produced, reported The New York Times.

The Financial Times also stated that Kurt Bock, BASF’s chief executive, played down the likelihood that the German group would do any large deals.

“There are always these expectations there should be something big, important and impressive [in terms of acquisitions],” he said after the release of 2015 results. BASF took “a very sober view” of acquisitions and would rather focus on selling non-core assets.