LONDON: British chemicals group Imperial Chemical Industries said it has agreed to a cash takeover by Dutch rival Akzo Nobel worth 8.0 billion pounds ($16.1 billion).
ICI has agreed to be bought after rejecting two previous offers by Akzo earlier in the summer. In a joint statement, Akzo Nobel said the board of ICI has accepted a cash offer of 670 pence for each ICI share.
The deal, which the pair are looking to complete by early December, is subject to shareholder approval, while Akzo has hinted at there being job losses.
Meanwhile Akzo said Henkel, the German maker of household chemicals and cosmetics, has agreed buy the adhesives and electronic materials businesses of National Starch and Chemical Co, which is owned by ICI, for 2.7 billion pounds.
“Akzo Nobel has today made a compelling offer which delivers full value for ICI reflecting ICI’s strong future growth prospects and strategic opportunities,” said ICI chief executive John McAdam.
“Accordingly, the ICI board will be recommending shareholders accept the 670 pence cash offer from Akzo Nobel as it believes it to be in their best interests,” he added.
Akzo said that it estimates annual pretax operating cost savings from ICI’s paints business of 280 million euros, and expects to achieve synergies from increased sales across the combined portfolio.
During a press conference in Amsterdam, Akzo Nobel chief executive Hans Wijers said “there may likely be job cuts” during the synergy-phase of the takeover of ICI.
The recommended offer is the culmination of two months of takeover negotiations which saw ICI rebuff two indicative offers from Akzo at 600 pence and 650 pence, before finally opening its books to the company last Monday following the 670 pence offer.