Croda–Uniqema deal set to pay off

Croda International will buy ICI’s Uniqema for £410m (€596m/$746m), in a largely cash deal that sees the completion of a process that started in February.

In the last financial year, the business being sold had sales of £626m; two-thirds of this was in specality oleochemicals.

The busineses to be divested had an Ebitda of £49m. On 31 December 2005, it had gross assets of £461m.

ICI says it will use around £130m to reduce the hole in its pension fund and around £256m will reduce debt. The deal is expected to complete in the third quarter, providing that Croda’s shareholders agree, and regulatory approvals are met. The deal does not include the business that operates under ICI Pakistan.

Croda will pay £370m cash and take on £40m in pension liabilities. The firm says it will be able to squeeze £20m in annual savings from the purchase by 2008.

Croda adds that the deal gives it a stronger position in consumer care, and this will increase earnings by 2008. Mike Humphry, Croda group chief executive, said: ‘Acquiring Uniqema has clear industrial logic and a compelling financial case.’

ICI took the strategic decision in February to divest Uniqema. Chief executive John McAdam, commenting on this, said today: ‘We are pleased with the outcome.’