Achesons Fate Hinges on Akzo


Henkels proposal to acquire part of Imperial Chemical Industries PLCs National Starch subsidiary – including lubricant and additives supplier Acheson Colloids Co. – for 2.7 billion pounds (U.S. $5.4 billion) remains in limbo, as it is conditional upon Akzo Nobels successful acquisition of ICI.

Akzo Nobel and ICI last week said they have reached agreement on terms of a recommended cash offer by Akzo Nobel. Under the terms of the transaction, ICI shareholders will receive 670 pence (U.S. $13.28) in cash for every ICI share, for a total of 8 billion pounds (U.S. $15.9 billion).

A court-sanctioned scheme of arrangement will implement the transaction, which is subject to approval of Akzo Nobels shareholders. It will go before them for a vote at an Akzo Nobel Extraordinary General Meeting. Subject to satisfaction of conditions, they expect the agreement to become effective during late November or early December 2007.

Separately, Henkel said it reached agreement with Akzo Nobel on acquiring National Starchs adhesives and electronic materials businesses, which posted sales of 1.26 billion pounds (U.S. $2.5 billion) in 2006.

Henkel said the acquisition would strengthen its existing lead in the global adhesives market, particularly in the industrial arena. According to Henkel, the acquisition would increase sales of its adhesives technologies business sector to 7.3 billion (U.S. $9.8 billion), or about half the total sales of Henkel.

Acheson Colloids, based in Port Huron Mich., is owned by ICI and is part of the electronic materials business of National Starch.

Acheson Colloids solid lubricant additives are dispersions containing microscopic lubricating particles that enhance the effectiveness of liquid lubricants. The company formulates dispersions containing graphite, molybdenum disulfide, PTFE or boron nitride. The dispersions are used in gear oils, conveyor chain lubricants, greases, engine oils or treatments, compressor oils and other heavy duty industrial lubricants.

On the consumer level, Henkel is known for its Loctite brand line of adhesives, which includes glues, sealants, fillers and epoxies. Its industrial products portfolio includes metalworking fluids, rust preventives, stamping fluids and DTI brand lubricants for aluminum and steel food and beverage can manufacturing.

In July, French lubricant producer Condat purchased Henkels wire drawing lubricants business for an undisclosed amount.

Akzo Nobel is based in Arnhem, Netherlands. It has four segments – human health, animal health, coatings and chemicals, subdivided into 13 business units, with operating subsidiaries in more than 80 countries. Akzo Nobel supplies a variety of base, functional, specialty and specification chemicals, including lubricants and surfactants.

In 2006, the company sold its ink and adhesive resins business to Hexion. In 2004, Akzo Nobel sold its phosphorus chemicals flame retardant business to a private equity fund managed by Ripplewood Holdings LLC. The resulting chemical company, Supresta, was acquired by Israel Chemicals Ltd. last month.

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