ICI India is planning to demerge its paints and specialty
chemicals businesses following Azko Nobel''s agreement
to acquire its parent company, UK bellwether Imperial
Chemical Industries Plc (ICI), for £8 billion ($16
coatings and chemicals maker Azko Nobel NV has an agreement
with German consumer group Henkel KGaA to sell ICI''s adhesives
and electronic material businesses for £2.7 billion
deal values ICI shares at 670 pence, which is a 22 per
cent premium to ICI shares the day before the target confirmed
talks with Akzo
ICI India''s paints
business, with revenues of Rs900 crore, will go to Azko
Nobel, while its Rs100 crore adhesives and electronic
material division will go to Henkel. The transaction is
expected to be completed by the end of the year.
the maker of Loctite glue, said it would buy adhesives
and electronic materials businesses, known as `National
Starch'', from the US unit of ICI.
acquisition is conditional on the completion of ICI takeover
by Akzo Nobel NV, the Dusseldorf, Germany-based company
said in a statement.
Netherlands-based Akzo Nobel clinched the deal after twice
improving its offer and winning an extension from competition
regulators. Akzo said it would pay 670 pence per share
to acquire ICI before selling `National Starch'' to Henkel.
preagreed on-sale of ICI''s adhesives and electronic materials
businesses to Henkel is entirely consistent with our promise
of financial discipline and provides the added benefit
of being able to return additional cash to our shareholders
in the near future," Akzo Nobel chief executive Hans
Wijers said in a statement.
Akzo''s two initial offers were rejected by the ICI board,
UK''s Takeover Panel also last month told Akzo to either
submit a formal offer by August 9 or walk away.
which makes Sikkens and Sadolin paints, had recently sold
its Organon Biosciences NV unit to Schering-Plough Corp.
for $14.4 billion.
addition to the acquisition of ICI, cash-rich Akzo said
it would extend a €1.6 billion ($2.2 billion) share
buyback by €3 billion.
said the integration of ICI''s paint business would yield
£280 million in synergies. The acquisition would
also make Akzo Nobel the world''s largest coatings maker.
UBS team led by Robin Budenberg, which also tapped Matthew
Greenberg at Merrill Lynch & Co, is advising ICI.
Mark Rawlinson and colleagues at Freshfields Bruckhaus
Deringer are ICI''s legal advisers.
Nobel chief executive said he was confident of convincing
shareholders to accept the company''s £8-billion
takeover of ICI despite opposition from a number of institutional
investors who believe the deal is too expensive.
TPG-Axon, the US fund which owns about 3.5 per cent of
Akzo Nobel, and the Dutch broker Rabo Securities are both
opposed to the deal.
also admitted the takeover would lead to job losses in
both businesses, and said that £213m had been earmarked
for expenses such as redundancy payments. "We don''t
start by thinking that if there are redundancies then
they are ICI redundancies, but from the position of employing
the best person for the job," Wijers said.
expects annual cost synergies of £190m from the
Chemical Industries was formed in 1926 by the merger of
four chemical companies and was a pioneer in the plastics
industry. It is the latest in a long line of British companies
to fall into foreign hands in recent years, including
P&O, BAA, Abbey, Corus, Pilkington and BOC.