On Jan. 3, 2006, Standard&Poor's Ratings Services placed its 'AA-' long-term and its 'A-1+' short-term corporate credit ratings on BASF AG on CreditWatch with negative implications, owing to the planned hostile offer for Engelhard Corp. and the recently announced intention to make an offer for Degussa AG's (BBB+/Watch Neg/A-2) construction chemicals business. At the same time, Standard&Poor's placed its 'A-' long-term and 'A-2' short-term corporate credit ratings on Engelhard on CreditWatch with positive implications. This CreditWatch listing reflects the likely improvement in Engelhard's credit quality if it is acquired by BASF, even taking into consideration BASF's financial profile pro forma for both transactions. The announced hostile takeover bid for Engelhard values the target at about US$5.2
