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BASF unit gets UK base
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January 19, 2000: 7:33 a.m. ET
Chemical firm moves drug headquarters to London, sharpens global focus
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LONDON (CNNfn) - BASF, Europe's largest chemicals company, is moving its global pharmaceutical headquarters to London from Germany to position itself at the epicenter of a European drug industry undergoing seismic change.
BASF, a global chemical giant with sales of about $29 billion in 1998, announced plans to establish a new global management committee called the Pharma executive board on Feb. 1, which will move to London on July 1 from its current base in Ludswighafen, Germany.
BASF said in a statement the new drugs committee will have a mandate to better focus the group's international strategy and maximize the division's flexibility in light of recent "large and dynamic changes in the international pharmaceutical industry."
The latest of those changes was announced this week as Glaxo Wellcome and British rival SmithKline Beecham unveiled a $76 billion merger to create the world's largest drug company. In December, Pfizer, maker of the blockbuster impotence treatment Viagra, sprung a $77 billion unsolicited bid for Warner-Lambert. That deal is still pending.
John Gilardi, a BASF spokesman, told Reuters Wednesday that in the current cut-throat climate everyone was talking to everyone else, and that BASF itself hadn't ruled anything out. The spokesman said the company was exploring a range of strategic options, including acquisitions, a joint venture and a sale of the business.
In its statement explaining the rationale behind BASF Pharma, the company depicted the move as a common-sense business decision given market realities.
"We have been very successful in recent years in further internationalizing the activities of BASF Pharma - however, about 90 percent of our sales now occur in foreign markets," said BASF board member Eggert Voscherau. "These new measures are the next logical steps in positioning ourselves as a fast and flexible pharma specialist."
In its new, London-based incarnation, BASF Pharma will concentrate on researching, developing, manufacturing and selling prescription medications. As a result, the company's pharmaceutical substances business will be transferred on June 1 to BASF's fine chemicals division.
The new executive board will be headed up by Thorlef Spickschen, the current president of BASF's pharmaceuticals division. Spickschen will relinquish his seat as a board member of BASF drug subsidiary Knoll AG, which will cease to have global responsibilities and see its board dissolved.
BASF Pharma encompasses the worldwide pharmaceutical activities of BASF. The unit had 1998 sales of 2.3 billion euros ($2.4 billion). It employs about 13,000 people out of BASF's global workforce of 105,000.
Shares of BASF (FBAS) were up 0.2 percent at 48.05 euros Wednesday in Frankfurt. 
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BASF
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