UPDATE 1-BASF says hard to make acquisitions in emerging mkts

Wed Sep 26, 2012 8:14am EDT

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By Ludwig Burger

DUESSELDORF, Germany, Sept 26 (Reuters) - BASF, the world's largest chemicals maker by sales, says it is struggling to make acquisitions in fast-growing markets, potentially making its growth targets harder to reach.

"The owners in many emerging markets say: 'Why should I sell when we are growing at such a rate?'," Chief Executive Kurt Bock told a business conference on Wednesday.

"Then again, some owners think in dynastic terms...buying companies in emerging markets is difficult."

The company, seeking to lift its proportion of sales from emerging markets to 45 percent from 34 percent by 2020, has said it would like to buy more companies in Asia.

But uncertain ownership structures and legal compliance issues often prove insurmountable hurdles.

Bock said that of the companies around the world screened by BASF as potential takeover targets, only about 3-4 percent were suitable and of those the owner's willingness to sell had not yet been assessed.

BASF has generated about one third of its growth from acquisitions in recent years.

Last week it agreed to buy U.S. crop protection company Becker Underwood for $1.02 billion to boost its farming pesticides division in the largest deal since its 2010 acquisition of Germany's Cognis, which makes additives for household products.

Bock said the Becker Underwood deal, which valued the U.S. seed treatment company at more than four times annual sales, was not too expensive and that when measured as a multiple of earnings, the price was in line with other comparable deals.

BASF has not disclosed Becker Underwood's earnings figures.

On average, global chemical companies currently have a market value of about one times annual revenue, according to Thomson Reuters StarMine.

Outright takeovers typically value a company at about 30-40 percent above market capitalisation. (Reporting by Ludwig Burger)

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