ICI said it had reached agreement on the terms after almost a year's negotiations. Although the disposal price has not been revealed, it is believed the business is changing hands for about pounds 60m.
BASF is purchasing ICI polypropylene (PP) business in Western Europe, comprising production facilities in Teesside and Rozenburg, in the Netherlands.
The business uses technology licensed from BASF and has about 460 employees - 330 in Britain.
The deal, which marks an important step in restructuring Europe's bulk chemicals sector, will double BASF's annual capacity to 600,000 tonnes, making it one of Europe's biggest producers. Polypropylene is used in a wide range of plastic products, including injection-moulded electrical and household appliances and car parts.
ICI said the disposal was part of its strategy to move out of low-margin commodity chemicals.
'We got out of polythene 10 years ago and are now getting out of polypropylene,' a spokesman said. 'After this sale ICI's only remaining involvement with PP will be in Australia.'
BASF, which does not have a PP business in Britain, said the former ICI workforce would be transferred to its payroll on 'existing contracts', but it refused to say whether job losses were planned. The business employs about 2000 at 12 sites in Britain.
It has an annual turnover of about pounds 100m and is estimated by analysts to have incurred about pounds 20m taxable losses in 1992, falling to about pounds 10m last year. The problems were largely caused by overcapacity and severe recession across Europe.
But the deal, to be completed next month, was welcomed. Martin Evans, of Hoare Govett, said: 'This is part of the steady rationalisation of ICI's bulk chemicals business. The company is clearly tidying areas where it does not see any long- term future.'
ICI is expected to return to the black with taxable profits of about pounds 240m for last year against a pounds 470m loss in 1992.
The market hopes for a strong recovery in profits to pounds 500m this year. But the shares fell 18p to 793p yesterday.Reuse content