BASF Exchanges its Container Coatings Business forPPG's Surfactants Activities.

MOUNT OLIVE, NJ--(BUSINESS WIRE)--Aug. 27, 1997--BASF Aktiengesellschaft, Ludwigshafen, Germany, and PPG Industries, Pittsburgh, have agreed to exchange parts of their respective operations.

PPG will purchase BASF's worldwide container coatings business. BASF will acquire PPG's worldwide

The container coatings business is part of BASF's Coatings Operating Division. In this area, BASF develops, produces and markets coatings for metal packaging, including the necessary printing inks and sealants for jar and bottle closures. BASF has production sites for container coatings in Germany, France, the Netherlands, Italy, the USA, Mexico, Brazil and the Philippines, and sales companies in Great Britain, Spain and Canada. Development centers are located in Germany, the USA and Brazil. In this transaction, PPG will acquire production sites for container coatings in Tiel, the Netherlands, and Barazante, Italy, as well as the marketing and technical center in Milford, Ohio (USA). PPG will take over technical staff at Milford as well as sales and technical service employees in Europe and at the production sites in Barazante and Tiel.

PPG produces coatings, glass, fiberglass and chemicals. In 1996, PPG achieved worldwide sales of about US $7.2 billion. The planned acquisition of BASF's container coatings activities by PPG will provide good, long-term prospects for this business and its employees worldwide.

"BASF is committed to the worldwide coatings industry and we expect to grow and prosper in the NAFTA region," said Frank McKulka, president of BASF Corporation's Coatings and Colorants Division. "We will strive to strengthen the market position of our core businesses, which include automotive OEM coatings, automotive refinishes, industrial coatings, colorants and textile/leather chemicals."

Strengthening BASF's Surfactants Business

For BASF, the proposed acquisition of PPG's surfactants business means a significant strengthening via diversification of its product portfolio and will ensure a better international market presence. Particularly in the NAFTA region, BASF's strategic position will greatly improve.

Surfactants are mainly used in detergents and cleaning products. They also find application in the production of auxiliaries for the paper, leather and textiles industries as well as in water treatment and metal working. BASF is a leader in the European surfactants business. The company operates surfactant production sites in Europe (Ludwigshafen, Germany and Antwerp, Belgium), and in the USA (Whitestone, South Carolina and Washington, New Jersey) with a total capacity of more than 200,000 metric tons per year. The capacity of the plant at Antwerp is currently being increased by 25,000 metric tons per year.

PPG has four production sites for surfactants in the USA (located in Gurnee, Ill.; Folcroft, Pa.; Appleton, Wis.; and Clear Lake, Texas) and one each in Great Britain, Belgium and France. According to the agreement, these sites will be acquired by BASF.

"The acquisition will provide us with improved access to other market areas, such as foods, personal care products and coatings. In addition, we will benefit from the backward integration of PPG's surfactants into our value chain that is based on ethylene oxide and propylene oxide," said L. Wayne Hill, Group Vice President, Specialty Chemicals, Chemicals Division, BASF Corp.

"Over the next few weeks, we will decide how best to integrate the two businesses. During the integration process, our top two priorities are not to disrupt supply and service to our customers, and to integrate the new business into BASF as smoothly and quickly as possible," he added.

BASF Corp., headquartered in Mount Olive, is the NAFTA region member of the BASF Group. With sales of $6.3 billion in 1996, BASF Corp. is among the top ten producers of chemicals and related products in the United States, Canada and Mexico. Its diversified product mix includes chemicals, polymers, automotive coatings, colorants, pharmaceuticals, nylon fibers and agricultural chemicals.

CONTACT: BASF

David Elliott/Felix Gress

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