30 November 2006 13:32 [Source: ICIS news]
LONDON (ICIS news)--Akzo Nobel is still committed to separating Organon, its pharmaceutical division, from its chemicals and coatings businesses during the first quarter next year, despite Pfizer pulling out of the asenapine drug collaboration this week, the company's chief financial officer said on Thursday.
Rob Frohn told delegates at the Merrill Lynch and ICIS Finance conference that phase III results for asenapine, a drug which would be used to treat bipolar disorder and schizophrenia, were mixed and Pfizer said that the drug was not attractive for their portfolio.
Frohn said the spin-off could take the form of an initial public offering (IPO) and Akzo Nobel may use the cash pile generated to fund new acquisitions, but he added that "the premium for acquisitions has gone up to a price we are not willing to pay".
Akzo is searching for acquisitions in both chemicals and coatings, particularly in Asian markets where it is looking to expand.
Frohn said it was looking at China, but would follow its customers – particularly if trade disputes between the US and China saw business move to Indonesia and Vietnam.
Akzo is the largest coatings producer in the world but has just 8% of the global coatings market.
"There is room for consolidation in the sector," said Frohn. "We have spent €330m ($436m) on buying coatings companies over the last two years but it could be more."
Frohn said the decorative coatings business in Europe was not in good shape and it is looking to take costs out of the business.
$1 = €0.76
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