BASF Buying Chinese Motorcycle Emissions-Control Company

Deal expected to close in first half of next year.

BASF said Monday it will acquire a motorcycle catalyst business in mainland China, a nod to the growing global demand for emissions-control technology.

Terms of the deal were not disclosed, but transaction is expected to be completed by the end of the second quarter of 2007.

BASF Catalysts LLC, a wholly owned subsidiary formed by BASF after its acquisition of Engelhard Corporation in 2006, will acquire Guilin REEcat Catalyst Co., a motorcycle emissions-control catalyst manufacturer based in Guilin, China.

Global motorcycle production is expected to grow at 5 percent annually through 2011, BASF said, with China expected to produce more than 40 percent of all motorcycles. In 2008, China will adopt Euro III emissions regulations, which call for significant reductions of hydrocarbon, NOx (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, the company said.