UpdateAkzo Nobel finalises £8bn ICI deal

02 January 2008 12:20  [Source: ICIS news]

(Updates, adding background in paragraphs 7-13)

 

LONDON (ICIS news)--Dutch coatings company Akzo Nobel has finalised its £8bn ($16bn/€11bn) purchase of ICI, the London Stock Exchange (LSE) said on Wednesday.

 

ICI shares will cease to be traded on the LSE from 08:00 local time on Thursday 3 January and it will be cancelled from the Official List, the exchange said in a press release.

 

Shareholders will receive 670p per share for each ICI share held when trading was suspended on 19 December, it added.

 

ICI has the well-known paint brands Dulux and Glidden, while Akzo Nobel owns Crown and Sikkens.

 

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

 

Akzo Nobel’s share price was only slightly up in early morning trading at €54.85.

 

ICI’s board accepted the £8bn bid on 13 August after rejecting two previous offers from the Dutch company and shareholders of both parties approved the deal in early November.

 

Akzo Nobel CEO Hans Wijers expects €375m of synergies from the combined companies, with most set to be achieved during the first year.

 

The acquisition would give Akzo Nobel additional purchasing power in raw materials, which account for half the costs in the coatings business.

 

Synergies from combining the two companies’ overheads structures, including moving the majority of ICI’s management to Amsterdam, would be achieved mainly in the second year, Wijers said at the company’s shareholders meeting.

 

The deal 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.

 

On 14 December, the European Commission and Canadian Competition Bureau ordered Akzo Nobel to divest several decorative paints brands with combined revenues of €300m.

 

In the UK and Ireland, Akzo Nobel committed to divesting manufacturing and warehouse sites in Darwen, Hull, Warrington, Dublin and Belfast, along with its Crown Decorator Centre network and the Crown, Crown Trade, Berger, MacPherson, Permoglaze and Sandtex brands.

 

($1 = £0.50/€0.69)

 

Mark Watts contributed to this article

 

By: Lucy Craymer
+44 20 8652 3214

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