LONDON — Courtaulds PLC and Hoechst AG completed the merger of their European viscose and acrylic fiber operations Tuesday, creating Europe’s second-largest man-made fiber producer, after Enimont of Italy.
The venture will be 72.5 percent owned by Courtaulds, with the remainder held by Hoechst. Hoechst has agreed not to sell its 27.5 percent stake for five years, after which Courtaulds has the right to exercise a call option on it, said Gordon Campbell, director of the group’s fiber operations.
The new company combines the viscose and acrylic fiber operations of Courtaulds in Grimsby and Bradford, England, and its acrylic fiber subsidiary in Barcelona with the Hoechst acrylic and viscose fiber businesses in Kelheim, Germany.
The combined businesses have annual profits of $16.17 million (11 million pounds) at current exchange rates and sales of $529.2 million (360 million pounds), Courtaulds said. Their net assets total about $154.35 million (105 million pounds), of which 57 percent is attributable to Courtaulds.
The work force totals 2,450. The venture will account for 30 percent of Europe’s total viscose capacity and 25 percent of its acrylic staple fiber capacity, Courtaulds said. The two groups announced plans to merge their European fiber operations in May 1993 and expected to complete an agreement by last fall.
Campbell said the delay resulted simply from the need “to make sure all the i’s were dotted and t’s were crossed — we didn’t want to rush an agreement.”
The deal has received all necessary regulatory approvals as well as the nod of the companies’ boards. The joint venture will begin operating immediately, Courtaulds said. The management team will be headed by Patrick Campbell, previously human resources director at Courtaulds and a former head of its acetate operations. Ulrich Howe of Hoechst will be marketing director; Heinz Moebius technical director; Brian Fulleylove managing director of the U.K. operations; Jaime Valls, managing director of the Spanish subsidiary, and Manus Monaghan finance director.
Campbell said the venture is aimed at strengthening the product portfolios and marketing operations of both companies. Most of Hoechst’s viscose production is sold into the textile market in Europe, while Courtaulds has focused on the nonwovens and industrial sectors, the director said.
In acrylics, Courtaulds is strongest in the worsted spun yarns area in the U.K. and in Spain in the cotton-spun yarns market. Hoechst has focused on the dry-spun yarns market for upholstery fabrics, Campbell said.
The deal excludes the Tencel and U.S. viscose businesses of Courtaulds, as well as the other fiber operations of Hoechst, which cover polyester, nylon and acetate.