19 April 1999 00:00 [Source: ICB]
Huntsman has gained a strategically important business in Europe with the £1.7bn ($2.7bn) purchase of ICI's Tioxide, polyurethanes and selected petrochemicals assets in the northeast of England, doubling the size of the company.
Jon Huntsman Snr said: 'This is a significant development for us and will complement our purchases of Monsanto and Texaco businesses.' The ICI assets will be held by Huntsman ICI (HICI) in which Huntsman will hold 70% and ICI the balance. In three or four years this can be dissolved with the value of ICI's stake agreed by pendulum arbitration if needed. Huntsman said he 'rather insisted' that ICI retain the stake in HICI. This will ensure that the transitions are managed well. HICI will probably change its name in a year to Huntsman International.
###7555###In the short term, HICI will probably be headquartered in Tioxide's London office and will provisionally be headed by Huntsman Snr. He declined to say what was the most attractive part of the deal, although he noted that 'Tioxide was a good diversification' and that polyurethanes would be a 'good, less cyclical business'. The deal puts Huntsman 'exactly where I hoped to be when we stated our plans for Europe several years ago', he said. Huntsman stressed his firm's desire to grow the businesses. ICI raised £1.05bn from the sale of the global polyurethanes business, about £500m for Tioxide and about £150m for the aromatics, hydrogen and North Tees logistics businesses. The Wilton cracker is not involved in the deal, but long term supply contracts from the nearby refinery will ensure product provision, said Huntsman.
ICI is taking advantage of this sale to put its acrylics business on the block too. Huntsman is interested, but ICI would not give a price for this or a precise time for the disposal.
The firm is also looking at reducing staff levels and overheads at its London nerve centre, although the number of redundancies has not been announced.
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