NOBEL’S PPG SIDE DEAL SETS STAGE TO ADVANCE COURTAULDS BID
LONDON — Akzo Nobel, the Dutch chemical and drug group, appeared to be heading for control of Courtaulds PLC after agreeing to sell two of the British company’s smaller coatings businesses to PPG Industries, for $286.7 million.
Pittsburgh-based PPG Industries, along with merchant bank Donaldson Lufkin & Jenrette, had indicated last month they might make a bid for Courtaulds higher than the Akzo Nobel offer of nearly $3 billion. Dollar figures are translated from the English pound at current exchange.
PPG said Wednesday that it now would not proceed with its bid. However, PPG also said it reserves the right to consider its options with regard to Courtaulds in “the unlikely event” that the Akzo Nobel offer to Courtaulds lapses or is withdrawn.
The first closing date of the Akzo Nobel offer is Tuesday. “We look forward to completing our offer for Courtaulds and bringing to an end a period of uncertainty for Courtaulds’ business,” Cees van Lede, Akzo Nobel’s chairman, said in a statement.
Akzo Nobel has agreed to sell the Courtaulds’ businesses of packaging coatings and U.S. decorative coatings to PPG, provided Akzo Nobel completes its takeover of the British firm. These business would have represented less than 7 percent of Courtaulds’ operating profits and less than 9 percent of its sales in the year ending March 31, 1999, Akzo Nobel said.
Meanwhile, Sabanci of Turkey has said it will not proceed with plans to form a 50-50 joint venture with the industrial fibers division of Akzo Nobel following the announcement of its planned takeover of Courtaulds. These operations now will become part of the overall fibers company that will be formed through the merger of Akzo Nobel’s fibers operation and that of Courtaulds.