Uniqema Sale Dependant on Right Offer

Feb 16, 2006 | Contact Author | By: Laurie DiBerardino
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Title: Uniqema Sale Dependant on Right Offer
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Although Uniqema will be placed for sale no later than the end of the first quarter, an ICI representative said that the ingredient company will only be sold if the right offer comes along. If Uniqema is not offered its rightful “value,” then it will be contained under the umbrella of the UK-based chemical giant, said ICI Director of Corporate Communications Regina Kilfoyle in an exclusive C&T interview.

 

“We will only sell Uniqema if we believe by doing so we will realize its value, and if not, we will not sell and will continue to invest in it as we have done in the past,” said Kilfoyle.

 

This reinforces speculation that Uniqema does not need to be sold, but rather is key in a larger plan.

 

Kilfoyle would not comment on the potential price tag, but some analysts have estimated the business could be worth more than £200 million. The division accounts for more than 11% of group sales, but only 4% of the profits.

ICI's chief executive, John McAdam announced the plan when announcing the company’s full report. Kilfoyle also confirmed that the personal care and lubricant business would not be sold piecemeal, but rather as one strong entity.

 

Kilfoyle stated that Uniqema is a great business, enjoyed a good fourth quarter and that the business is definitively “cash-generative.” The decision to do so was simply to create a different more-aligned higher-growth portfolio for their investors, said Kilfoyle. “This is in no way a criticism of the business,” she added.

 

Some remarked that this is the largest strategic-driven decision McAdam has made since taking the helm some three years ago.

 

ICI has been lightening its load in the last few years selling off major chunks of its operations. In 1999, Huntsman purchased ICI's polyurethanes, aromatics, Tioxide and Wilton cracker operations, in a £1.7 billion transaction. In 2002, Johnson Matthey acquired Synetix, which makes materials used to speed up chemical reactions, in a £267m deal.

 

ICI scooped up Uniqema from Unilever in 1997.

 

-Laurie DiBerardino