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Last Updated: Tuesday, 30 May 2006, 15:49 GMT 16:49 UK
US chemical firm backs BASF offer
A BASF chemical plant in Port Arthur, Texas
BASF is the world's largest chemicals company by sales
German chemicals giant BASF is set to take over rival firm Engelhard in a $5bn (2.7bn) deal.

US-based Engelhard is recommending its shareholders accept a new $39-a-share offer, after a five-month stand off.

BASF first launched a bid in January, saying it was hoping to create a major player in its fields of expertise.

As part of the deal, Engelhard has agreed to drop a share buy-back scheme designed to discourage investors from being seduced by BASF's earlier offers.

The takeover was cleared by US competition authorities in February and expects to receive EU regulatory approval.

BASF is the world's biggest chemicals firm with over 80,000 employees.

Its shares fell by 2.5% on Germany's Dax index when the deal was announced.

Engelhard is a leader in pollution-reducing catalytic converters for automotive and industrial use.

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