BASF Weighs €3 Billion Sale of Catalyst Assets

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(Bloomberg) — BASF SE has hired Morgan Stanley to help it explore options for its business making catalysts for combustion engines, including a possible sale, people with knowledge of the matter said. 

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The German chemicals company is considering options for its recently-carved out Environmental Catalyst and Metal Solutions unit, which also includes catalyst recycling and associated precious metal services. A sale could value ECMS at about €3 billion ($3.3 billion), according to the people. 

Shares in BASF rose as much as 2.5% on Tuesday. The stock was up 1% at 3:10 p.m. in Frankfurt, valuing the company at roughly €41.2 billion.

Catalytic converters are components made in part with precious metals, such as platinum, that are used to control pollutants from combustion engines. BASF acquired US-based Engelhard, creator of the modern catalytic converter, for about $5 billion in 2006.

Deliberations around selling ECMS are ongoing, the structure of the disposals could still change and there’s no certainty they’ll lead to a transaction, the people said, asking not to be identified discussing confidential information. A representative for BASF declined to comment, while a spokesperson for Morgan didn’t immediately provide comment.

BASF is Europe’s biggest chemical producer. It has forecast lower operating profit this year as it braces itself for a future without cheap Russian gas. The company is closing a number of energy-intensive factories, including two ammonia plants and related fertilizer facilities, resulting in hundreds of job cuts at its main Ludwigshafen site.

—With assistance from William Wilkes and Eyk Henning.

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