AKZO Nobel Finalise ICI Deal
Akzo Nobel has also entered into an agreement with Henkel to sell the business divisions known within the ICI Group as the “Adhesives Division” and the “Electronic Materials Division”, both of which form part of the “National Starch” business.
13/08/07 The Board of Management and Supervisory Board of Akzo Nobel N.V. and the Board of Imperial Chemical Industries PLC have reached agreement on the terms of a recommended cash offer by Akzo Nobel for the entire issued and to be issued share capital of ICI, including the ICI Shares underlying the ICI ADSs.
The offer price of 670 pence for each ICI Share values the entire existing issued ordinary share capital of ICI at approximately £8.0 billion, and represents a premium of approximately:
• 22 per cent. to the Closing Price of 549 pence per ICI Share on 15 June 2007 (being the last Business Day prior to the announcement by ICI that it had received an approach from Akzo Nobel);
• 35 per cent. to the average Closing Price of approximately 498 pence per ICI Share for the six months ended 15 June 2007 (being the last Business Day prior to the announcement by ICI that it had received an approach from Akzo Nobel); and
• 44 per cent. to the Closing Price of 464 pence per ICI Share on 9 March 2007 (being the last Business Day prior to Akzo Nobel’s announcement in relation to the disposal of Organon BioSciences).
In connection with the acquisition of ICI, Akzo Nobel has entered into an agreement with Henkel to sell all assets and liabilities comprising the business divisions known within the ICI Group as the “Adhesives Division” and the “Electronic Materials Division”, both of which form part of the “National Starch” business of ICI, for £2.7 billion (€4.0 billion) in cash (calculated on a debt and cash free basis and subject to certain adjustments). The transaction with Henkel is not a condition to completion of Akzo Nobel’s acquisition of ICI and will be implemented following the Effective Date.
Commenting on the announcement, Hans Wijers, CEO of Akzo Nobel, said: “I am delighted by this transaction which will be a transformational step in implementing our strategy. We will create a leading global coatings and specialty chemicals company with a diversified geographic presence and well developed access to fast-growing markets in Asia-Pacific, particularly China and Latin America. Through this combination, we will be able to realise significant synergies and create value for our shareholders. At the same time, our customers, employees, pension funds and other stakeholders will benefit from the size and reach of the enlarged group. The pre-agreed on-sale of ICI’s Adhesives and Electronic Materials businesses to Henkel is entirely consistent with our promise of financial discipline and provides the added benefit of being able to return additional cash to our shareholders in the near future.”
Commenting on the Transaction, John McAdam, CEO of ICI, said: “The management and employees of ICI have done much to transform the performance of ICI over the last few years, putting in place a clear strategy and strong focus on operational excellence. ICI has leading market positions across its businesses and competitive strengths in emerging economies in Asia and Latin America, together with technically advanced products aligned to strong growth trends. However, Akzo Nobel has today made a compelling offer which delivers full value for ICI reflecting ICI’s strong future growth prospects and strategic opportunities. 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.”
Morgan Stanley is acting as financial adviser to Akzo Nobel. Merrill Lynch and UBS are acting as joint financial advisers and joint corporate brokers to ICI.
