Web Date: November 26, 2007
Smoothing The Way
Under the proposal, the Dutch company commits to divest the majority of its own decorative coatings business in the U.K. and Ireland, as well as its De Keyn brand in Belgium.
The commission had originally set a deadline of Nov. 30 for a review of the ICI acquisition. It has now set a provisional deadline of Dec. 14 to review the deal, which is valued at more than $16 billion.
Akzo Nobel executives figure that the pledge to divest some of the firm's coatings operations will forestall any objections from the EC and allow it to close the deal on Jan. 2, 2008.
Akzo's move is not a surprise. At the time the acquisition was announced, industry observers predicted that the company would have to sell off some coatings operations to satisfy antitrust objections in Europe. The merger as proposed would combine ICI's Dulux paints and coatings with those of Akzo to give the Dutch company roughly a 10% share of the global paints and coatings industry.
Even with a divestment, the ICI acquisition will still mean a significant enlargement of Akzo's product slate and market share. The purchase of all of ICI would have given Akzo Nobel total 2006 sales of just under $19.2 billion, a sizable jump from the firm's actual sales of $12.6 billion.
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