23 April 1998: According to recent press reports, Akzo Nobel has announced that it will acquire its British rival, Courtaulds, in a UK 1.83 billion (US$ 3.08 billion) deal, putting the Dutch company a…
23 April 1998: According to recent press reports, Akzo Nobel has announced that it will acquire its British rival, Courtaulds, in a UK 1.83 billion (US$ 3.08 billion) deal, putting the Dutch company at the top of the global paints market (see GlassOnline report of 16 April 1998). Under the terms of an agreement for a recommended cash offer, Akzo will pay 450 pence for each ordinary Courtaulds share, in line with the price named by Akzo on 6 April when it confirmed market speculation of an imminent bid. The deal will propel Akzo past Imperial Chemical Industries PLC of Britain and Sherwin-Williams Co. of the US in the global paints market, while also giving it a firm stand in Asia. Analysts reportedly said the move also meant that Akzo had taken the lead on rivals such as ICI, which were thought to be waiting for Courtaulds to disentangle its paint and fibre operations before bidding for the coatings arm. “We are very happy to have bought the Rolls-Royce of Great Britain“s paint and fibres industry,” said Cees van Lede, Akzo“s chairman. Akzo said it planned to combine the fibre operations, which would account for 21% of total sales, up from a current 15%, with the possibility of spinning them off. Meanwhile, Courtaulds said it planned to sell its polymer unit. Mr. Van Lede said the deal established Akzo as a market leader in coatings, delivered a solid base in Asia, and created a fibres unit that was strong enough to survive a tough global market. Analysts reportedly said the purchase of Courtaulds“ paints business represented a successful move for Akzo, but cast some doubt on the financial logic of getting more deeply involved in fibres.