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Friday, 15 December, 2000, 10:53 GMT
Laporte agrees £1.36bn takeover

German specialty chemicals giant Degussa-Hüls has offered £1.36bn ($2bn) to buy its UK rival Laporte.

The deal has already been accepted by Laporte's management, and will move the combined group into the top ranks of European chemicals firms, rivalling only Ciba of Switzerland and British firm ICI.

This is not a cost-cutting story, it is a growth story

Utz Felcht, Degussa
Meanwhile, BASF, another German chemical giant, has been on the selling side. The company will receive $6.9bn (7.8bn euros, £4.7bn) in cash for its US based Knoll Pharmaceutical subsidiary.

The buyer is Abbott Laboratories, which hopes that the deal will improve its line-up of new and coming drugs.

"Our acquisition of BASF's pharmaceutical business is an excellent strategic fit that demonstrates Abbott's commitment to our global pharmaceutical business and offers significant synergies," said Miles White, Abbott's chief executive.

BASF's share price soared on the news, as it managed to achieve a price that was 15% higher than expected.

Knoll is a company with sales of about $2.1bn a year. Its top-selling drug is Meridia, an obesity treatment.

Knoll employs 1,300 people in the United States, while BASF has a workforce of about 100,000 people.

Going for Laporte growth

Degussa's chief executive Utz Felcht said: "Together with Laporte, new Degussa has all the necessary success factors to be 'best in class' in fine chemicals."

Degussa and Laporte produce or process fine chemicals including catalysts, metals, additives and ingredients for detergents.

The offer was made through Degussa SKW, a firm owned jointly by subsidiaries of Degussa-Huels and SKW Trostberg, which in turn are part of E.On - a huge German utilities group.

Shareholders can expect 697 pence cash per share, a 17% premium on Laporte's closing price on Thursday.

Laporte's share price has been rising steadily during the past year.

Degussa-Hüls is one of Germany's largest listed companies, and employs 44.000 people world-wide.

Laporte has restructured itself several times over the past few years, most recently selling its non-speciality organics businesses to K-L Holdings.

At the end of 1999, the firm employed some 5,200 people - already down from 7,400 five years ago.

Now there are just 2,300 people on Laporte's payroll, about half of them in the UK.

Industry experts say the takeover will result in only a few job losses, although Degussa said it expected to make pre-tax cost savings of 20m euros ($17.7m, £12.1m) next year alone.

Degussa's chief executive tried to reassure Laporte's staff, saying he wanted to grow the enlarged company, not reduce it. "This is not a cost-cutting story, it is a growth story," he said.

On the German stock market, Degussa's share price fell by nearly 5% on the news.

Laporte's shares, though soared in early trading - up 90.25 pence to 686 pence, compared with Thursday's close of 595.75p.

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24 Sep 00 | Business
BP lines up German buy
31 Aug 00 | Business
Europe's energy giants ponder merger
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