Akzo Nobel will sell UK paints to close ICI deal

23 November 2007 16:08  [Source: ICIS news]

LONDON (ICIS news)--Akzo Nobel has agreed with the European Commission (EC) to divest its UK decorative paints business to help complete the acquisition of ICI, the Netherlands-based coatings and chemicals producer said on Friday .

The commission said it had extended until 14 December, or by 10 working days, its anti-trust investigation into the £8bn ($16.8bn/€11.1bn) agreed purchase of the UK-based paints and starch maker.

Akzo Nobel said the commitment package with the EC “essentially covers the divestment of the majority of our decorative coatings business in the UK and Eire.” It includes the Crown brand and De Keyn decorative paints in Belgium, it added.

The UK-based decorative business, Akzo Nobel Decorative Coatings Limited, had sales of £179.1m in 2006, up 0.9% on the prior year. Its operating (EBIT – earnings before interest and tax) loss was £3.9m including £3.05m of redundancy charges.

The business had lost money every year for the past five years, consultant martin Simons noted in an analysis of the company, with the most significant loss in 2005 of £10.1m.

Simons said the divestment was not unexpected and that he believed Akzo Nobel might have to divest assets in Canada to see the ICI deal through.

The UK decoratives business had been performing badly, he suggested, however, special items covering redundancies and closures had totalled £25m between 2001 and 2006.

($1 = £0.48/€0.67)

By: Nigel Davis
+44 20 8652 3214

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