Competitor Analysis - ANO killing them off, page-25

BASF will not be able to afford to buy us out at this rate...

https://finance.yahoo.com/news/basf-joins-chemical-makers-cutting-201119538.html

"BASF SE fired a warning shot signaling a weakening global economy, as the world’s largest chemical company said slowing markets from cars to crops and the impact of the U.S.-China trade war threaten to cut profit by 30% this year."

A 30% drop in EBIT would leave them with ~4B EBIT on ~21B of Debt, so basically they're screwed. Their stated dividend policy is to increase the dividend every year, which was 2.8B last year. No way they can maintain that. They have been selling off mature businesses and buying smaller growth businesses, which has increased their debt load over time while basically shrinking their revenue and EBIT. Their Personal Care segment is an important profit center (EUR700m EBIT) but just around 10% of revenues. With so many issues in so many segments to confront at once, I'm willing to bet that the decision makers at BASF totally drop the ball on this one and leave the door open for ANO to capture the lion's share of the sun care actives market.

For BASF to make a bid for ANO today, they would have to add at least EUR 1B of debt and basically no trailing EBIT, which at this point might require them to issue junk bonds and further limit their ability to pay dividends. If they wait, they will have to add billions more, which just seems like an increasingly improbable outcome if you model these businesses one year, two years, three years out. I would place a higher probability on ANO buying BASF assets coming out of bankruptcy one day!