GOLDMAN Sachs’ private equity arm and Permira are poised to announce the €3bn (£2.5bn) sale of Cognis, the nutritional ingredients maker, to German chemicals giant BASF.
The deal, which could be revealed as soon as this morning, comes after months of negotiations over price. BASF, advised by Lazard, scooped the asset after Goldman Sachs and Permira rebuffed a rival offer from the relatively small US outfit Lubrizol.
Cognis supplies raw materials for foods, drinks and dietary supplement products. It turned a profit of €25m last year on sales of €2.6bn. BASF is a much larger business, with sales of €50.7bn in 2009.
A source close to the transaction said Goldman and JPMorgan had looked at a flotation as an alternative exit for Cognis’ backers, but decided a trade sale would yield a better price.
“The strategic option has always been pretty strong with that business because it’s attracted a lot of interest in the past,” the source said.
The tie-up will help BASF grow its niche chemicals offering and diversify away from oil-based goods. The group bought Switzerland’s Ciba for €3.8bn including debt in 2008.