Finnish government blocks Kemira/Dynea/Sydsvenska merger
03 December 2001 13:48 [Source: ICIS news]
LONDON (CNI)--Plans to merge Finnish chemicals producer Kemira with Industri Kapital's chemicals subsidiaries Dynea and Sydsvenska Kemi were blocked on Monday by the Finnish government.
The government decided to block the deal "when the lengthening of the parliamentary proceedings and the public debate on the deal threatened to cause unreasonable inconvenience for the operations of the companies involved", Kemira said in a statement.
Trading in Kemira's shares was stopped on the Helsinki stock exchange this morning ahead of the Finnish state council emergency meeting to discuss the proposed merger.
The merger was pending before Parliament but it was widely reported by the Finnish press over the weekend that the transaction was unlikely to win parliament approval, mainly because of concerns about Kemira's share price.
Under proposed deal, Finnish formaldehyde-based resins producer Dynea was to have acquired Sydsvenska Kemi and was then to be combined with Kemira, which is 56% government owned. Sydsvenska comprises the former businesses of Sweden's Perstorp and Finland's Neste Oxo.
Government minister Sinikka Monkare said today that various alternatives will be examined for Kemira. "I believe that constructive operating models for developing the company will be found," he added.
Kaj Friman, Kemira's vice president and group treasurer, said Kemira will revert to its previous strategy to grow its pulp and paper, water treatment chemicals and paints and coatings activities.
By: Anna Jagger
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