ICI India plans demerger as Akzo Nobel agrees to acquire UK parent

14 August 2007

Mumbai: ICI India is planning to demerge its paints and specialty chemicals businesses following Azko Nobel''s agreement to acquire its parent company, UK bellwether Imperial Chemical Industries Plc (ICI), for £8 billion ($16 billion).

Dutch coatings and chemicals maker Azko Nobel NV has an agreement with German consumer group Henkel KGaA to sell ICI''s adhesives and electronic material businesses for £2.7 billion ($5.5 billion).

The deal values ICI shares at 670 pence, which is a 22 per cent premium to ICI shares the day before the target confirmed talks with Akzo

ICI India''s paints business, with revenues of Rs900 crore, will go to Azko Nobel, while its Rs100 crore adhesives and electronic material division will go to Henkel. The transaction is expected to be completed by the end of the year.

Henkel, the maker of Loctite glue, said it would buy adhesives and electronic materials businesses, known as `National Starch'', from the US unit of ICI.

The acquisition is conditional on the completion of ICI takeover by Akzo Nobel NV, the Dusseldorf, Germany-based company said in a statement.