Significant Events

BASF has closed the acquisition of significant businesses and assets from Bayer, which generated combined sales of €2.2 billion in 2017, and Bayer had offered to divest in the context of its acquisition of Monsanto. The acquisition of a range of businesses and assets from Bayer in the areas of seeds, crop protection, non-selective herbicides, nematicide seed treatments, biotechnology and digital farming was closed on August 1, 2018. This was followed by the acquisition of Bayer’s global vegetable seeds business, which mainly operates under the trademark Nunhems^®, on August 16, 2018. The all-cash purchase price amounts to a total of €7.6 billion, excluding any outstanding purchase price adjustments. Following the closing of the transaction with Bayer, BASF renamed the division from Crop Protection to Agricultural Solutions. In addition, the division has established a new global business unit for seeds and traits.

On September 27, 2018, BASF and LetterOne signed a definitive transaction agreement to merge their oil and gas businesses in a joint venture, which will operate under the name Wintershall DEA. In 2017, the combined business of Wintershall and DEA had pro forma sales of €4.7 billion, income from operations before depreciation and amortization (EBITDA) of €2.8 billion and net income of €740 million. Closing of the transaction is expected in the first half of 2019, subject to the approvals of merger control and foreign investment authorities as well as mining authorities and the German Federal Network Agency. Until closing, Wintershall and DEA will continue to operate as independent companies.

The signing of the agreement has an immediate effect on the reporting of BASF Group and thus on this quarterly statement: The sales and EBIT of the oil and gas business are no longer included in the respective figures for the BASF Group – retroactively as of January 1, 2018, and with the prior-year figures restated.¹ This is also reflected in the explanations on the course of business on the following pages. Until closing, the Wintershall Group’s income after taxes will be presented in the income before minority interests of the BASF Group as a separate item (“income before minority interests from discontinued operations”). The assets and liabilities of the oil and gas business were reclassified to a disposal group as of the end of the third quarter, and depreciation and amortization of its assets has been suspended from this date onward. We therefore adjusted the BASF Group’s outlook for the full year 2018 on September 27, 2018.²

The gain from the change from full consolidation to the equity method will be shown in income before minority interests from discontinued operations on closing. From closing, BASF will account for its share in the joint venture Wintershall DEA using the equity method and include its share of Wintershall DEA’s net income in EBIT before special items and EBIT for the BASF Group (reported under “Other”).