BASF Fourth Quarter Beats Expectations, Reiterates Outlook

The end of fiscal 2000, represents almost a full year of BASF being a new player in the lawn and landscape industry with its purchase almost a year ago of the American Cyanamid herbicide division of drug company American Home Products Corp. (AHP) (see BASF Purchases AHP’s Cyanamid Division). The integration of BASF's $3.8 billion acquisition of American Cyanamid, the group's biggest takeover yet, resulted in American Cyanamid being consolidated into BASF accounts since the third quarter.

Fourth-quarter 2000 operating profit for BASF before special items eased 2.6 percent to $775 million. BASF reiterated it expected to post growth in full-year operating profit before special items of at least 10 percent in 2001 and 2002 as well.

"In general, we are positioning ourselves for the upturn in the chemical market expected in 2002 in the United States and world markets,'' BASF Chief Executive Juergen Strube said.

Strube said he expected a better climate in the chemical sector in the second half before a clear upturn next year. He also said he believed BASF's market capitalization - which has more than tripled in the past five years - still did not reflect the true value of the company.

BASF also said it expected to have about $18.33 billion for possible acquisitions after proceeds feed through this month from the recent $6.9 billion sale of its drugs unit to U.S.-based Abbott Laboratories Inc.

Strube said that his firm was not targeting a large merger and most of its growth would be internal. "We're considering selective acquisitions, for example, becoming stronger in insecticides or finding a business in Asia," he told Reuters in an interview. ''But primarily it's growth from within."