By Eva Kuehnen

FRANKFURT (Reuters) - BASF (BASF.DE: Quote, Profile, Research) has launched an agreed cash offer to acquire smaller Swiss rival Ciba (CIBN.VX: Quote, Profile, Research) for 3.4 billion Swiss francs ($3 billion), a deal that would boost its position in the specialty chemicals business.

The move by the world's biggest chemicals maker on Monday follows Dow Chemical's (DOW.N: Quote, Profile, Research) $15.3 billion bid for rival Rohm and Haas ROH.N in July, signalling that a consolidation of the industry is speeding up amid high raw material and energy costs.

Chemical companies with a broader portfolio are increasingly moving into the specialty chemicals segment, which offers higher margins than commodity chemicals like polypropylene, which is used in basic plastics, and is less cyclical.

Basel-based Ciba, which makes colours for plastics, paper and wood, shocked the market last month by announcing it might sell key businesses after it posted a surprise first-half net loss due to a writedown in its water and paper treatment unit.

"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," said UniCredit analyst Andreas Heine in a note to clients.

"BASF has the chance to leverage its product offering with a global sales force and to reduce costs on the supply chain management."

A banker close to the deal said further deals in the sector could follow.

He cited Lanxess (LXSG.DE: Quote, Profile, Research), Rhodia (RHA.PA: Quote, Profile, Research) and Saudi Basic Industries 2010.SE, all competitors of BASF, as possible predators, and said Ciba's cross-town rival Clariant (CLN.VX: Quote, Profile, Research) and Finland's Kemira (KRA1V.HE: Quote, Profile, Research) were seen as attractive targets.