UPDATE 1-BASF CEO says can buy any company that fits

(Adds details, background, share price)

By Mantik Kusjanto

FRANKFURT, Dec 13 (Reuters) - BASF (BASF.DE), the world's biggest chemicals company by sales, can buy any company that fits its terms, said its chief executive, who also aims to protect investors from dividend volatility.

"With our first-class rating and solid finances, we are able to make any kind of acquisition that meets our strict criteria," Juergen Hambrecht told reporters late on Wednesday.

Standard & Poor's rates BASF AA- with a stable outlook -- the highest among European chemicals.

BASF had said it could spend up to 10 billion euros ($14.7 billion) on acquisitions. It competes with the likes of Dow Chemical (DOW.N), DuPont (DD.N) and Saudi Basic Industries Corp 2010.SE (Sabic) for a share of the 2 trillion-euro market.

In an embargoed speech, Hambrecht also said the company was aiming to increase its dividend every year, and to keep it stable in difficult time.

"We want to set a record every year, that's clear, but we also want to keep the dividend stable in bad times, which can't be ruled out," he said.

The company increased its dividend for 2006 by 50 percent to 3 euros a share and has said it plans to continue with its progressive dividend policy in 2007.

BASF also plans to buy back shares for a total of 3 billion euros ($4.4 billion) in 2007 and 2008.

BASF shares rose 0.9 percent to 98.95 euros by 1238 GMT to be the top European blue-chip gainers, and outperformed a 1.1 percent dip in the DJ Stoxx European chemicals index .SX4P.

Hambrecht, who has worked for BASF for more than 30 years, also gave a first hint for next year, saying signals so far are indicating "an ordinary, confident outlook for 2008".

Bracing for a possible slowdown in North America, Hambrecht said he expected Asia, driven by China, would more than offset the potential weakness. Asia accounted for about 15 percent of BASF sales last year.

Hambrecht also said the company would divest assets that could not meet its internal standards.

The company is in the process of selling its styrenics operation, which had annual sales of 3.2 billion euros. BASF has said the planned sale has drawn investor interests, despite rising feedstock prices and overcapacity.