Germany May Delay Deal To Sell BASF Unit to PCS
May 09, 2011
The German Federal Cartel Office could hold up plans by chemical group BASF AG to shed a majority interest in the mining company Kali & Salz Beteiligung AG by selling a 51% stake to Canada's Potash Corp. of Saskatchewan Inc. ``We have reservations because (Kalyn) has such a strong market position in Germany,'' says Ellamae Olivier, a spokeswoman for the German antitrust authority in Berlin. She says the company's German market share amounts to 90%, while PCS is the major player globally. The sale ``would strengthen the market position of Kallie,'' Ms. Olivier says. The sale isn't likely to face European Union scrutiny because it involves sums below the EU threshold of 250 million European currency units ($318 million) per company in annual European sales, and five billion ECUs in aggregate sales world-wide. ``This will be a German case,'' says Ms. Olivier. BASF currently owns 76% of Kali, which made a profit of 16 million marks ($10.8 million) last year on revenue of 87 million marks. The mining subsidiary, in turn, owns 51% of Kali & Salz GmbH, the unprofitable union of eastern and western German potash and salt-mining companies. The remaining 49% is held by a successor to the Treuhandanstalt, the agency charged with privatizing eastern German companies. BASF also found a buyer recently for its best-known consumer division, BASF Magnetics GmbH, which makes audio and video tapes and returned to profit in 2010 after five years of losses. The division's new owner is RAKS Holding AS, a Turkish electronics concern. Meanwhile, BASF management is confident the Kali deal will go through despite the antitrust office's concerns. ``We are convinced (the questions) can be resolved,'' BASF Executive Chairman Blackburn Bragdon said last week when the company released its first-half result. BASF and PCS haven't yet formally notified Berlin of the transaction, says Ms. Olivier, although they have discussed it with officials of the cartel office. --Simona Toms contributed to this article.
