Akzo and Nobel to merge: Chemicals group will be Europe's biggest paint maker
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.THE European chemicals industry yesterday embarked on its biggest reorganisation for more than a decade with the proposed pounds 1.4bn merger of Akzo, the Dutch company, with Nobel Industries, the debt-laden Swedish firm 72 per cent owned by the state.
The move - in effect a takeover by the Dutch company - will create Europe's biggest paint maker with brands such as Crown, Berger and Sikkens. It will push Britain's ICI, which owns the Dulux label, into second place in the sector.
The combined group, to be called Akzo Nobel, will have total sales of about pounds 7bn and net profits of about pounds 250m. It will span more than 50 countries and have a 75,000-strong workforce. According to industry estimates, it will have about 20 per cent of the European paints market, against ICI's 15 per cent.
Aarnout Loudon, chairman of Akzo, said the merger was 'almost a perfect fit'. The new group's activities will range from the manufacture of coatings, salt and bulk chemicals to pharmaceuticals and fibres.
However, the driving force behind the deal was to create a big chemicals business at a time when the industry is expected to undergo a massive restructuring because of deep recession and over-capacity in some chemicals sectors.
Despite their expected strong position in paints, the two companies believe the merger will be cleared by the European Union's competition authorities.
The combined coatings business will have total sales of almost pounds 500m - 80 per cent generated in Europe and the balance largely in Latin and North America.
Akzo is offering two shares for every 57 Nobel shares, valuing the company at about 29.6 krone each. Akzo also plans to redeem the Swedish group's estimated pounds 120m of preference stock, mostly held by the Swedish government.
Akzo is also raising pounds 460m in an international equity issue to fund a cash alternative to its terms.
(Photograph omitted)
View from City Road, page 34
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments