Akzo Nobel make a strong move to acquire ICI ........ where would this leave Eka Chemicals and National Starch?

In the future, will Eka Chemicals and National Starch both be owned by Akzo Nobel?

Akzo Nobel confirmed this morning that it approached the board of ICI with a view to entering into discussions about a cash offer for ICI. The 600p a share (GBP 7.2 bn bid) offer was rejected by ICI, but the door is left open for a higher offer coming from Akzo Nobel (see articles in the Financial Times and Wall Street Journal). There is also the sensitive issue of the ICI pension fund to resolve and today the trustees made it clear that they have the power to determine the size of the pension deficit which could range from GBP500 mio to GBP 2.2 bn and that the trustees would expect discussions with any serious suitor (see FT article).

Many analysts consider 600p to be an attractive price, and feel this approach could start competing bids from rivals including BASF, DuPont, Dow Chemical, and even possibly from private equity companies.

Regarding the paper chemicals activities of Eka Chemicals and National Starch, there would have to be a question as to whether the business fits with the core activities and future focus of Akzo Nobel.

"In parallel, Akzo Nobel will continue its share buy-back program of €1.6 bn launched on May 3, 2007 and will further evaluate tax efficient options of returning cash to shareholders and optimizing its capital structure consistent with its growth strategy."

For further comments, and a warning to ICI against rejecting Akzo's approach just to protect its old ICI pride when Akzo could be the best option it has see the FT Lex article. Although, Forbes thinks otherwise, and through the day ICI share value has increased.