Series Title | European Voice |
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Series Details | 11/06/98, Volume 4, Number 23 |
Publication Date | 11/06/1998 |
Content Type | News |
Date: 11/06/1998 By DUTCH chemicals group Akzo Nobel has revealed that it is willing to make concessions on its aircraft paint businesses in a bid to win European Commission approval for its 2.6-billion-ecu take-over of the UK group Courtaulds plc. The deal, under which Courtaulds coatings operations would be incorporated into Akzo's decorative paints division, would take Akzo Nobel back to the top of the paints premier league, following UK-based rival Imperial Chemical Industries' acquisition offensive two years ago. Akzo admits the take-over would swell by “between one-half and two-thirds” its world market share in specialist aerospace coatings. “We are aware that the aerospace sealants and coatings businesses is likely to raise some eyebrows among the anti-trust authorities,” said a spokesman for the Dutch chemicals giant. Aides to Competition Commissioner Karel van Miert confirmed this week that the Commission was set to make an initial ruling on the merger next Thursday (18 June), although they refused to comment on whether the deal was likely to be subjected to a full-scale merger probe. But Akzo believes early concessions over the aerospace business could head off this risk. “We would obviously be prepared to make some concessions there in order to see the deal approved. There are talks going on at the moment about this with a number of parties, but I can't say more,” said the company's spokesman. The enlarged Akzo Nobel's hi-tech aerospace coatings business includes the protective and decorative paints used in aircraft manufacturing and maintenance to protect metallic and non-metallic surfaces of aircraft bodies from the rigours of corrosion, impact damage and ultraviolet light. The combined aerospace activities under the spotlight would also control much of the world market for high- performance sealants used in fuel tanks and to ensure cabin pressurisation. However, the Akzo spokesman said any concessions would fall short of a full-scale sell-off of its aerospace coatings and sealants business. “What you have got to understand is that the main reason for this deal is that we want to grow in the coatings sector,” he said. The promise to EU anti-trust officials comes after the Dutch chemicals giant saw off US competition to finalise its take-over bid for the British specialist paints and chemical fibres company. Akzo thrashed out a compromise deal with US paintmaker PPG Industries, which also wanted to take control of Courtaulds. PPG was persuaded to back off, partly because it was reluctant to accept the valuation of Courtauld's fibre business, but also because Akzo agreed to sell two of Courtauld's smaller coatings undertakings in the US for 170 million ecu. These include Courtauld's architectural coatings business which is dominated by the US-produced Porter brand, with sales worth 80 million ecu last year. Akzo sees its Courtaulds deal as a key linchpin in its strategy of expanding into the potentially enormous Far East chemicals market. “Adding Courtauld's business to ours gives us a much better presence in Asia, particularly in marine paints. If you can use that network in Asia to expand in other coatings areas, then you have something very attractive,” said a company spokesman. At the same time, the Courtaulds deal boosts Akzo's strength in the industrial fibres business. Long term, this section could be demerged from the main company, with current Courtauld's chairman Gordon Campbell likely to be at the helm. “If you combine the fibres business of Courtaulds with ours, you can create a really interesting, profitable unit which can be run as a business in its own right,” said the Akzo spokesman. “We have said we want to combine the two businesses and demerge the resulting company before the year 2000.” |
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Subject Categories | Business and Industry, Internal Markets, Law |
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