Dulux paint maker ICI is expected to confirm an £8.1bn (€12bn) takeover deal today, which could see one of the oldest names in British industry pass into foreign hands.
Dutch chemicals group and Crown paint maker Akzo Nobel is set to announce the terms of a recommended 670p a share offer for Imperial Chemical Industries (ICI), according to newspaper reports.
But even if an agreement is announced, Akzo still has to win the support of its shareholders, some of which are reported to be opposed to the deal on the grounds that it is too expensive.
US-based hedge fund TPG-Axon, which holds a 3.5% stake in Akzo, is understood to have warned the Dutch group that it would not support an acquisition at this price.
But Akzo is hoping that its agreement to sell ICI’s adhesives and electronic materials operations to German chemicals company Henkel, the maker of Persil and Theramed toothpaste, for £2.7bn (€4bn) will help alleviate investor concerns.
Akzo has been stalking ICI for months, having first launched a £7.2bn (€10.6bn) approach in March. It has until 10am on Monday to lodge a formal offer for the group.
It is also thought that the prospective cost savings of a tie-up between the two firms, set to be announced as part of the offer document, could also help allay investors’ fears.
Some ICI shareholders were said to have been holding out for a bid of at least 700p a share, but given the recent turmoil in global markets they are now seen as unlikely to oppose the deal.
ICI, which was created in 1926 from the merger of four British chemicals companies, employs around 26,000 staff worldwide and has major UK bases in Slough, Stowmarket in Suffolk, Prudhoe in Northumberland, Birmingham and Hull.
Akzo Nobel was formed in 1994 through the merger of Dutch firm Akzo with Swedish company Nobel Industries. In 1998 the business bought Essex-based fibres firm Courtaulds.
Akzo is keen to get its hands on ICI’s Dulux paints business, known for its shaggy dog adverts, after it agreed to offload its pharmaceuticals business Organon BioSciences to Schering-Plough in March to concentrate on its core paints and speciality chemicals operations.
ICI was responsible for the discovery of polythene and perspex and coined the phrase plastics. It spun off its pharmaceuticals division as Zeneca in 1993.