Arnhem, the Netherlands, August 5, 2002 – Akzo Nobel Coatings has signed a contract with Ferro Corporation to acquire its powder coatings businesses in the Americas and Asia Pacific. The value of the transaction is USD 73 million free of cash and debt. The Cleveland, Ohio - based company posted total sales for its powder coatings businesses in the Americas and Asia Pacific of USD100million in 2001. The acquisition will be subject to approval by competition authorities in the United States and additional approvals will be sought as and where appropriate.
“This deal resolves a major strategic gap in our global powder coatings business,” said Rudy van der Meer, Member of the Akzo Nobel Board of Management responsible for Coatings. “We are already one of the world’s market and technology leaders in this important growth sector of coatings, with strong positions in many countries, but our existing U.S. powder operations are relatively small.
“This acquisition not only gives us a top 3 position in what is the single largest powder market in the world, but it also gives us a stronger platform for servicing our global customers. Furthermore, it complements our existing business in Mexico and builds on our existing strengths in Korea and China.”
Fritz Fröhlich, Akzo Nobel’s Chief Financial Officer, said: “The funds needed for this transaction were included in our 2002 plan and the acquisition does not interfere with our commitment to further reduce our debt by at least EUR200million by year-end.”
Bill McPherson, General Manager of the business unit Powder Coatings added: “This acquisition is an excellent strategic fit with our existing businesses. Ferro is a leading supplier to a wide range of industrial sectors, including the U.S. automotive and appliance powder markets where it has preferred supplier positions and approvals with the top users of powder coatings in both sectors.”
Under the terms of the deal Akzo Nobel will take over all of Ferro’s powder operations in the United States - including factories in Nashville, Tennessee and Brecksville, Ohio, and development & management facilities in Cleveland, Ohio. In Asia Pacific, the deal includes the purchase of Ferro’s powder coatings operations in Ningbo, China, as well as its joint venture interests in Ulsan, South Korea. In total 540 people will transfer to Akzo Nobel.
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