FRANKFURT (Standard&Poor's) May 31, 2006--Standard&Poor's Ratings Services said today its ratings and outlook on Germany-based chemicals producer BASF AG (AA-/Negative/A-1+) are unaffected by BASF's announcement that its cash purchase offer on Engelhard Corp. (A-/Watch Pos/A-2) has obtained full support from Engelhard's board. The $4.6 billion ($39 per share) transaction is still subject to shareholders' approval: Shareholders have until June 5, 2006, to tender their shares. As previously stated, this acquisition is within the parameters of BASF's ratings. However, it is expected that BASF will balance investments, share buybacks, and dividends over the next few years to achieve adequate free cash flow generation to reduce its debt in order to maintain its current rating. In particular, we
