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Unilever to Sell Chemical Businesses for $8 Billion

May 08, 1997|From Reuters

Unilever, the giant Anglo-Dutch consumer products company, said Wednesday that it agreed to sell its international specialty chemical businesses to Imperial Chemical Industries of Britain for $8 billion in cash.

ICI Chief Executive Charles Miller Smith hailed the deal as a way of transforming the company and removing its exposure to the cyclical downturns of the heavy-chemical business.

The stock market welcomed the deal, boosting American depositary receipts of ICI shares $3.125 to a close of $50.375 on the New York Stock Exchange.

Unilever's ADRs lost $1.125 to close at $108.875, also on the NYSE.

Unilever said the sale will result in an exceptional gain, before taxes and expenses, of more than $5 billion, initially wiping out its net debt.

The businesses to be sold include National Starch & Chemical Co. of the United States, Quest International, Unichema International and Crosfield.

Smith said ICI first looked at the specialty chemical businesses nearly 12 months ago. The acquisition was "a genuinely unique opportunity to change [ICI] and create a lot of value," shifting ICI's portfolio toward less cyclical, light-end chemicals, he said.

"Even in the depths of recession, these businesses held their profits," Smith said, adding that they are highly specific businesses focused on growing areas of the world such as Asia and Latin America and covering a whole range of end-user applications.

ICI's business is currently centered on bulk chemicals, paints and explosives.

Unilever put the units up for sale in February, and Smith said that during an 18-month search for a means to diversify ICI, the Unilever businesses "kept cropping up as the best candidate."

National Starch is based in Bridgewater, N.J.; Quest and Unichema are in the Netherlands.

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