BASF, the German chemicals company, will take over Ciba, the Swiss company that makes chemical additives for the plastics, paper and coatings industries.

The cash offer of SwFr50 per share has been accepted by Ciba's board and values the business, including net debt, at SwFr6.1 billion (£3 billion), according to BASF.

Ciba's performance has been weak. The company reported a loss in the second quarter, after reporting in April that it was suffering from the rising cost of raw materials, currency fluctuations and production problems.

Ciba's shares rose 29 per cent in morning trading in Zurich before closing at SwFr48.68, up SwFr10.68. The cash offer represents a premium of 32 per cent over the price at which the shares closed on Friday.

BASF said that the deal would strengthen its portfolio and expand its position in specialty chemicals, particularly in the plastics and coatings industries and in water-treatment chemicals. In paper chemicals, it would make BASF the leading supplier, the company said.

Jürgen Hambrecht, BASF's chairman, described the bid as a “last, best and final offer” and said that the acquisition of Ciba would enhance earnings by the second year after the takeover: “We recognise the strength of broad areas of Ciba's portfolio,” he said, “even if the company's performance has disappointed analysts and investors, especially in the second quarter of 2008.”

Mr Hambrecht said that integration of Ciba's business into BASF would require “necessary further restructuring measures [which] will give the businesses sustainable strength and offer them a long-term perspective for profitable growth. The precondition for this is to rigorously improve operational excellence.”

Ciba reported a first-half net loss of SwFr569 million, including a big asset writedown, and suggested that it might sell parts of the company. Standard & Poor's, the credit rating agency, lowered its rating on Ciba because of the deterioration in its profitability.

Andreas Heine, a UniCredit analyst, said in a note: “In our view, Ciba is not in good shape at all. The takeover is therefore a story of restructuring and consolidation within the chemicals industry. BASF has the chance to leverage its product offering with a global sales force and to reduce costs on the supply-chain management.”

Oliver Schwarz, an Equinet analyst, said in a note that BASF was a key supplier of raw materials to Ciba and could address some of the Swiss company's weaknesses by integrating it into its own operations. He said that the deal valued Ciba at 15.2 times estimated 2009 earnings.

BASF's offer is expected to start on October 1 and to be completed in the first quarter of next year. It depends on several conditions, such as the tender of at least 66.67per cent of all nominal shares, approval by the relevant authorities and removal of various takeover defences in Ciba's statutes, BASF said.

The BASF move comes after Dow Chemical's $15.3 billion (£8.53 billion) bid for Rohm and Haas in July and indicates that a consolidation of the £1,580 billion chemicals market industry is speeding up, given impetus by high raw material and energy costs.

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