MUMBAI/PUNE, Nov 4: German multinational BASF Ag has decided to sell its entire 51 per cent equity in Dr Beck & Co (India) to the Schenectady group, USA, the world's largest producer of alkyl phenols and a leader in the electrical insulation business.

Schenectady's acquisition, part of a global agreement with the German giant, may also see Dr Beck hiving off its automotive paints business to BASF's 100 per cent arm in India, BASF Industries.

The selloff is part of the BASF group's strategy to get out of the electrical insulation systems business and focus on its core competency-- automotive and container coatings. Dr Beck will, however, have to seek shareholder approval for the transfer of the automotive paints business to BASF Industries in India.

Dr Beck manufactures a wide range of products in electrical insulations, construction chemicals, and automotive and container coatings at its facilities in Pimpri near Pune in Maharashtra and Ankleshwar in Gujarat.

Top company officials confirmed that the sale of the electrical insulation systems business to Schenectady will see a transfer of BASF group's 51 per cent stake in Dr Beck to the United States multinational.

Dr Beck officials said the deal would not trigger the takeover code in India. "The matter has been looked into by our lawyers and it is not expected to trigger the code."

The exact details, however, could not be ascertained. Asked about the 300-and-odd Dr Beck employees in India, officials said that approximately 240 would be retained by the BASF group.

The remaining employees are expected to be transferred to the Schenectady-managed company. Dr Beck (India) registered sales of Rs 68.25 crore and a net profit of Rs 4.04 crore in fiscal 1995-96.

Following BASF's exit from Dr Beck, it would be interesting to see whether Mahindra Holdings & Finance (a Mahindra group company), which holds 17.47 per cent of Dr Beck's equity, will continue to retain its stake. The indications are that M&M may not divest its stake immediately. As on March 31 this year, Mahindra Holdings held 12,39,493 equity shares of Rs 10 each in Dr Beck India.

The Schenectady group, which recently forged a joint venture with Mumbai-based Sunshield Chemicals for the manufacture of alkyl phenols, has two major global businesses -- chemicals and polymers.

Schenectady is the world's largest producer of alkyl phenols, cresols and xylenols and has facilities in Texas, New York, Switzerland and Japan. These products find application in a range of industries, including antioxidants, surfactants and industrial resins.

The group's polymers division, which makes industrial resins and coatings, has two plants in Schenectady, New York state, besides other units in Australia, Brazil, Canada, France, Japan, Mexico and the UK. In India, the Schenectady group already has a subsidiary, Schenectady India Ltd. It is not clear what role this company will play following the Dr Beck deal.

The Dr Beck scrip has been on a downward path since August this year and is currently traded at Rs 38.25. Between August 8, when the scrip was traded at Rs 60, and Tuesday, the scrip fell 55 per cent.