Akzo Nobel has strengthened its position as the world’s largest manufacturer of industrial coatings following the go-ahead an £8bn deal to buy ICI.
The Dutch chemicals group has boosted its share of the US$86bn-a-year global coatings industry from 10% to 15% and now controls some of the world’s best known wood protection and decorative brands, such as Cuprinol, Sadolin and Sikkens, and Dulux, Crown and Berger paints.
Analysts said Akzo was a clear leader in industrial and marine applications, but has lagged in the decorative sector, where its margins have been weaker.
By absorbing ICI, Akzo has increased worldwide sales of coatings from more than €6bn a year to almost €10bn. The nearest competitor Sherwin Williams has about half of the combine’s annual sales.
Although some analysts have criticised the sale price of 670p a share, Akzo also gets greater access to emerging markets, such as China, where ICI has been stronger. Akzo identified China as major target for growth in a recent study of the global coatings market, in which it said competition in developed markets continued to push down prices and margins.
Akzo chief executive Hans Wijers said: “We will create a leading global coatings and specialities chemical company with a diversified geographical presence.”
ICI produces Dulux, as well as Cuprinol, Xysladecor, Maxilite and Pillack wood treatments and coatings. Akzo owns Crown, Berger and Timonex flame retardent paints, Sadolin and Sikkens wood treatments, and Casco adhesives.
