UpdateAkzo Nobel buys UK's ICI in £8bn swoop

13 August 2007 11:23  [Source: ICIS news]

(Adds latest share prices and detail in paragraphs 5-9)

 

SINGAPORE (ICIS news)--Akzo Nobel said on Monday that ICI has finally accepted its recommended cash offer that values its shares at 670p each, totalling £8bn ($16.3bn), ending weeks of speculation during which the UK coatings company rejected the Dutch firm’s bid twice.

 

The bid represents a premium of approximately 22% to the closing price of 549p a share on 15 June, the last business day prior to ICI’s announcement that it had been approached by Akzo Nobel.

 

The deal is expected to take effect during late November or early December.

 

Germany’s Henkel has also agreed to pay £2.7m in cash to acquire ICI’s adhesives and electronic materials businesses, once the takeover is complete.

 

In a webcast, Akzo Nobel CEO Hans Wijers said the two companies fit very nicely together because Akzo Nobel was very strong in Europe and Eastern Europe while ICI played a key role in America, Asia and Latin America.

 

The acquisition was expected to generate savings of €65m in raw material costs in coatings through scale effects, €65m in streamlining operations and an additional €150m in administrative and corporate synergies.

 

These would counteract €315m of pre-tax implementation costs for combining the businesses.

 

Wijers added that there would be job losses in research and development.

 

At 10:15 UK time, ICI shares rose nearly 2% on Friday’s close at 636p. Akzo Nobel shares also rose around 2% to €57.70.

 

Mark Watts contributed to this article

 

($1 = £0.49/$1 = €0.73)

By: Jeanne Lim
+65 6780 4359

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