BASF to Buy American Home Products Unit

BASF, Europe’s largest chemical maker, agreed to buy American Home Products Corp.’s farm chemicals unit for $3.8 billion in cash in a bid to catch up with rivals in the agricultural products industry. The addition of American Home’s Prowl herbicide and other chemicals would double the BASF unit’s sales to $3.6 billion a year and boost profit from 2001 as the company cuts costs by $250 million. For Madison, N.J.-based American Home, the cash from the sale of its American Cyanamid unit and the breakup fee from a recently scuttled merger with Warner-Lambert Co. will help it settle litigation stemming from diet drugs and attract a new partner, analysts said. Shares of American Home rose $3.06 to $55.50 on the NYSE.