Henkel KGaA has reached an agreement with Akzo Nobel N.V. on the value of a back-to-back transaction. Through the transaction, Henkel will acquire the adhesives and electronic materials businesses of National Starch, a subsidiary company of ICI plc. The agreed transaction value is £2.7 billion (US$5.4 billion). The signing of the back-to-back agreement is still subject to the approval of the Henkel Shareholders’ Committee. The transaction is conditional on the successful completion of the takeover of ICI by Akzo Nobel.
“With this agreement, we have taken a major step towards the successful conclusion of the planned acquisition. We consider the agreed transaction value to be a fair price, since the new businesses offer exceptional complementarity with our portfolio,” says Ulrich Lehner, chairman of the management board of Henkel. “Moreover, we expect significant synergies and a substantial improvement of our growth and profit prospects to arise from the planned combination.”
With this acquisition, Henkel reportedly will strengthen its position in the global adhesives market, particularly in the industrial business. The National Starch businesses to be acquired realized sales of about £1.26 billion GBP (US$2.4 billion) in 2006 and would increase sales of the Adhesives Technologies business sector to approximately €7.3 billion (US$9.9 billion), which is around half the total sales of Henkel.