BASF Hopes U.S. Listing Will Lift Stock --- German Chemicals Group Reflects Old Economy; Trading Begins Today
LUDWIGSHAFEN, Germany -- During a decade as chief executive of BASF AG, Juergen Strube has bucked business cycles and prevailing political winds to transform a provincial German company into the world's biggest integrated chemicals group.</br></br>After the collapse of communism in the early 1990s, BASF forged a controversial alliance with Russian natural-gas producer RAO Gazprom and spent billions of dollars building pipelines across Germany; today, oil and gas is the company's most profitable division. During the 1998 Asian economic crisis, BASF snapped up chemical producers in Korea and speeded up construction of huge chemical complexes in Malaysia and China. Earlier this year, Mr. Strube flouted the furor in Europe over genetically modified crops by launching a 700 million euro ($664 million) research blitz in plant biotechnology. Then, raising the ante, BASF shelled out $3.8 billion for the agrochemical division of American Home Products Corp.</br></br>This week, Mr. Strube is pitching an Old Economy story to investors besotted with the New Economy. BASF stock begins trading on the New York Stock Exchange today.</br></br>It's the kind of challenge Mr. Strube savors. For all its global clout, BASF remains a relative unknown in U.S. financial markets. American investors currently hold a meager 8.5% of the German company's shares outstanding.</br></br>BASF isn't issuing any new stock in conjunction with the New York listing. But Mr. Strube hopes the U.S. stock market debut will boost the company's valuation and enable BASF to use its shares to finance future U.S. acquisitions. Despite spending 243 million euros so far on a two billion euro share-buyback program, BASF stock is down more than 10% so far this year at yesterday's closing price of 44.75 euros.