BASF Makes All-Cash Proposal To Acquire Engelhard; BASF Intends To Offer US$37.00 Per Share For a Total of US$4.9 Billion; Acquisition Would Make BASF a Leading Provider in the Global Catalyst Business.

LUDWIGSHAFEN, Germany -- BASF Aktiengesellschaft (FWB: BAS, NYSE: BF (ADR), LSE: BFA, SWX: AN), the world's leading chemical company has made an all-cash proposal to acquire all outstanding shares of common stock of Engelhard Corporation (NYSE: EC), Iselin, New Jersey, USA, a Fortune 500 company and leading supplier of goods for catalysis and surface finishing, for US$37.00 per share or an aggregate of US$4.9 billion. This price represents a 23% premium above the December 20, 2005 closing price of Engelhard's stock of US$30.05 and a 30% premium over Engelhard's 90-day average share price (VWAP) of US$28.42 as of December 20, 2005. This price also represents a premium to Engelhard's 2005 year-end closing price of US$30.15 and to the four-year-high closing price of US$32.49 achieved on July 14, 2004.

By acquiring Engelhard, BASF would become a leading provider worldwide in the dynamically growing catalyst market. By combining the R&D activities of both companies, BASF would create a unique global technology platform for catalysts and open up further growth and innovation potential.

The proposal reflects what BASF believes is an opportunity for significant value for Engelhard's stockholders: a robust premium over Engelhard's current stock price; and a fully financed, all-cash transaction with no significant regulatory hurdles anticipated based on present knowledge.

BASF has made efforts to negotiate a friendly transaction with Engelhard's Board of Directors and management. BASF has said that its team is prepared to meet with the Engelhard team to see whether Engelhard can demonstrate value in addition to that discernible from the publicly available information that might enable BASF to increase the price that it proposes to pay for Engelhard by US$1.00 per share. These efforts were rebuffed.

BASF expects to commence a tender offer for all of Engelhard's shares of common stock shortly, which will be filed with the Securities and Exchange Commission (SEC) together with all relevant tender offer documentation. The offer will be subject to customary conditions, including that a majority of Engelhard's shares of common stock, on a fully diluted basis, are tendered into BASF's offer, and that Engelhard's board take all necessary actions to make its shareholder rights plan and the supermajority voting provisions in its certificate of incorporation inapplicable to BASF's offer. BASF's proposal is not subject to any financing condition.

Emittent:BASF Aktiengesellschaft, Carl-Bosch-Strasse 38, D-67056 Ludwigshafen ISIN:DE 0005151005; DE 0008846718; DE 000A0EUB86

Listed: Amtlicher Markt in Frankfurt (Prime-Standard), Dusseldorf, Berlin- Bremen, Hamburg, Munchen, Stuttgart; Schweizer Borse; London Stock Exchange; New York Stock Exchange

This release is provided for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell any securities of Engelhard Corporation. The proposed tender offer for the outstanding shares of Engelhard common stock described in this release has not commenced. Any offers to purchase or solicitation of offers to sell will be made only pursuant to a tender offer statement (including an offer to purchase, a letter of transmittal and other offer documents) filed with the Securities and Exchange Commission ("SEC"). Engelhard stockholders are advised to read these documents and any other documents relating to the tender offer that are filed with the SEC carefully and in their entirety when they become available because they will contain important information. Engelhard stockholders may obtain copies of these documents for free, when available, at the SEC's website at www.sec.gov or by calling Innisfree M&A Incorporated, the Information Agent for the offer, at [phone] (Toll Free from the U.S. and Canada) or 00800 7710 9971 (Toll Free from Europe).

This release contains forward-looking statements. All statements contained in this release that are not clearly historical in nature or that necessarily depend on future events are forward-looking, and the words "anticipate," "believe," "expect," "estimate," "plan," and similar expressions are generally intended to identify forward-looking statements. These statements are based on current expectations, estimates and projections of BASF management and currently available information. They are not guarantees of future performance, involve certain risks and uncertainties that are difficult to predict and are based upon assumptions as to future events that may not prove to be accurate.

Many factors could cause the actual results, performance or achievements of BASF to be materially different from those that may be expressed or implied by such statements. Such factors include those discussed in BASF's Form 20-F filed with the SEC. We do not assume any obligation to update the forward- looking statements contained in this release.

January 3, 2006
P 081e
Michael Grabicki
Tel. [phone]
Cell: +49.172.749.18.91
Fax [phone]
[e-mail]

US-contact:
Timothy Andree
Phone:[phone]
Cell 973 519-5195
Fax[phone]
[e-mail]

BASF AG
Carl-Bosch-Strasse 38
67056 Ludwigshafen
Deutschland

ISIN: DE0005151005 (DAX)
WKN: 515 100
Listed: Amtlicher Markt in Berlin-Bremen, Dusseldorf, Frankfurt (Prime
Standard), Hamburg, Hannover, Munchen und Stuttgart; London; Paris