Akzo looking to save with ICI buy
DUTCH chemical group Akzo Nobel has said it expects its planned takeover of ICI to help it make savings of about £1.75bn.
Akzo agreed in August to buy ICI, which makes Dulux paints, for £8bn to create the world’s biggest paintmaker and retain its lead in industrial coatings.
The deal is expected to close on January 2, Akzo said in a shareholders’ circular for an extraordinary meeting on November 5, when shareholders will be asked to approve the deal.
ICI employs about 100 on Teesside and has a large number of pensioners living locally.
In the 1960s it employed about 30,000 people on Teesside.
Akzo had to raise its bid for ICI twice. It still has to win shareholder support and faces opposition from at least one major investor, US fund TPG-Axon.
The Netherlands group already has 900 staff at its International Paints plant in Felling, Gateshead.
ICI also has a Hammerite plant in Prudhoe, Northumberland.
Akzo said it planned to sell ICI’s Specialty Starches business, which had revenues of £263m and core earnings of £44m in the first half of the year.
“It is a beautiful business, but probably not a business to which Akzo Nobel can add much value,” Akzo chief executive Hans Wijers said, adding there was substantial interest from industrial buyers.
In a side deal, German consumer products group Henkel will buy ICI’s adhesives and electronic materials units for £2.7bn, conditional on Akzo buying ICI.
Akzo said the Henkel deal was on track.
Buying ICI will give Akzo a market-leading position in paint and also allow it to retain its lead in industrial coatings, under threat from US PPG Industries, which plans to buy Dutch rival SigmaKalon for about £1.5bn.
A combined Akzo-ICI will have about 15% of the world’s £40bn-a-year coatings industry.
