BASF to Acquire Motorcycle Catalyst Business in China

12 December 2006

BASF will acquire a motorcycle catalyst business in mainland China to meet the growing global demand for emissions-control technology.

BASF Catalysts LLC, a wholly-owned subsidiary formed by BASF after its acquisition of Engelhard Corporation in 2006 (earlier post), will acquire Guilin REEcat Catalyst Co., Ltd (REEcat), a motorcycle emissions-control catalyst manufacturer based in Guilin, China. Terms of the deal were not disclosed. The transaction is expected to be completed by the end of the second quarter of 2007.

Global motorcycle production is expected to grow at 5% annually through 2011, with China expected to produce more than 40% of all motorcycles. In 2008, China will adopt Euro 3 emissions regulations, which call for significant reductions of hydrocarbon, NO_x (oxides of nitrogen) and CO (carbon monoxide) emissions from two-wheel vehicles.

These tighter clean air regulations will cause demand for emissions systems to grow faster than overall motorcycle production rates worldwide.

A Sino-Swedish joint venture founded in 1991, REEcat is a pioneer developer of mobile emission-control technologies in China. The company manufactures and sells catalysts and systems for motorcycles and small engines, including diesel, LPG and CNG. The company has a manufacturing plant and a research and development center in Guilin, and sales offices in Guangdong and Chongqing, China.