GO
Loading...

Enter multiple symbols separated by commas

ICI Rejects Improved $16 Billion Akzo Bid, Talks Continue

Britain's ICI has rejected an improved 7.8 billion-pound ($15.9 billion) takeover proposal from Dutch rival Akzo Nobel, saying the 8% increase in the offer price is not enough.

ICI, the maker of Dulux paints, said on Monday that the two sides were still in talks after it rejected a 650 pence a share cash proposal from Akzo but it had not opened its books to the world's largest maker of industrial coatings.

Akzo, the maker of Crown paints, said it had teamed up with German consumer products group Henkel over its proposed bid, but there was no certainty it would make a better offer. Henkel would take on ICI's adhesives and electronics materials business if a deal went through, Akzo said.

Acquiring ICI would give Akzo a boost in the $85 billion coatings industry, allowing it to increase worldwide market share from around 10% to around 15%, ahead of second-ranked Sherwin Williams's 9% share.

"Akzo Nobel is evaluating its options. Whilst discussions continue, Akzo Nobel will remain financially disciplined," said in a statement.

ICI, which rejected a 600 pence a share proposal from Akzo in June, said the new proposal was still too low.

"The board of ICI considered this revised proposal and unanimously rejected it on the grounds that it failed to recognise the full strategic value of ICI," it said in a statement.

"ICI met with Akzo to explore whether it could be increased. This meeting did not result in an improved proposal. Discussions are continuing, however, ICI has not granted Akzo access to due diligence information."

A deal with ICI, which makes 27% of its sales in Asia, would also give Akzo a bigger exposure to fast-growing emerging markets and help it fix its underperforming European decorative business, with minimal antitrust issues, analysts said.

ICI, Britain's biggest chemicals company, has long been tipped as a bid target after slimming to focus on higher-margin paints and adhesives. A failure to buy ICI would make Akzo vulnerable to takeovers, analysts said.

U.S. groups Dow Chemical and DuPont, Germany's BASF and India's Reliance might also bid for ICI, according to analysts.

Akzo shares ended at 60.59 euros on Friday while ICI's closed at 577 pence.

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

U.S. Video

  • Hero miles for military members: Real estate magnate's plea

    Chairman of the Fisher House Foundation, Ken Fisher, discusses the Hero Miles program with CNBC's Dina Gusovsky. During Military Appreciation Month, Fisher is asking every traveler to donate 1,000 of their miles to replenish the Hero Miles programs that is in danger of running out.

  • Cramer shuts down this market's haters

    "Mad Money" host Jim Cramer on why this market can't stop, won't stop.

  • From the battlefield to the boardroom

    Your Grateful Nation is dedicated to helping Special Forces veterans enter the corporate world and Knot Standard provides complimentary suits to vets. Mad Money's Jim Cramer spoke with Rob Clapper, Your Grateful executive director; John Ballay, Knot Standard co-founder and president; Tej Gill, retired U.S. Navy Seal; and Darren McB, active duty U.S. Navy Seal.