Lone Star Is in Exclusive Talks for BASF Construction Unit

(Bloomberg) -- Billionaire John Grayken’s Lone Star Funds is in exclusive talks to acquire the construction chemicals unit of BASF SE, people with knowledge of the matter said.

The private equity firm trumped a rival consortium that included Cinven and Bain Capital, according to the people, who asked not to be identified because the information is private. A deal could value the business at about 3 billion euros ($3.3 billion), one of the people said.

BASF announced a strategic review of the construction chemicals division last year. The division supplies mortars and cement additives, as well as waterproofing materials and sealants under the Master Builders brand.

No final agreements have been reached, and negotiations could still fall apart, the people said. A spokesman for BASF confirmed the company is in advanced talks with one party in relation to the construction chemicals business, declining to comment further.

Representatives for Lone Star and Cinven declined to comment, while Bain couldn’t immediately be reached for comment. Reuters reported the exclusive talks earlier Wednesday, citing unidentified people.

Shares of BASF declined 0.7% to 68.37 euros in Frankfurt as of 9:07 a.m., valuing the chemical maker at 63 billion euros

--With assistance from Andrew Noël.

To contact the reporters on this story: Eyk Henning in Frankfurt at ehenning1@bloomberg.net;Myriam Balezou in London at mbalezou@bloomberg.net;Sarah Syed in London at ssyed35@bloomberg.net

To contact the editors responsible for this story: Ben Scent at bscent@bloomberg.net, Dinesh Nair

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