Akzo Nobel to feed organic growth through ICI buy

08 October 2007 08:21  [Source: ICIS news]

MUMBAI (ICIS news)--Dutch coatings company Akzo Nobel expects the €11.5bn ($16.3bn) acquisition of UK’s ICI to accelerate its organic growth and further improve profitability through operational excellence, it said on Monday.

"This is a year of incredible transformation. We are fully on track in creating one of the world's leading industrial companies," said Akzo Nobel chairman Hans Wijers.

The company will maintain a solid investment grade rating in the single ‘A- to BBB+’ range, he added.

"We have a strong portfolio of businesses in attractive growth markets and, coupled with the synergies of the ICI integration, we should be able to outgrow our markets and deliver EBITDA [earnings before interest, tax, depreciation and amortisation] margins in the upper half of our peer group," Wijers said.

Akzo Nobel expects a total post-tax net present value benefit of around €2.5bn from the ICI integration, after implementation costs, he added.

"The new-look company will be the global leader in coatings and specialty chemicals and will have a strong presence on all continents," Wijers said.

"While we are taking a transformational step, we remain committed to financial discipline and will continue to create medium-term value for our shareholders," he added.

Akzo Nobel shareholders are due to vote on the ICI purchase on 5 November, which it expects to complete on 2 January 2008.

In its 2008-2009 capital return programme, the company is also planning a €2bn share buyback programme in the second half of next year, Wijers said.

($1 = €0.71)

By: Divya Chowdhury
+65 6780 4359

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