Divestment of ICI's Chlor-Chemicals, Klea and Crosfield Operations

11-Dec-2000

CI has agreed terms with Ineos, a major global producer of Acrylics, Ethylene Oxide and derivatives, for the sale of its Chlor-chemicals, Klea and Crosfield businesses. The consideration payable to ICI places a value on these businesses of about £325m in aggregate. Subject to certain conditions and regulatory approvals, completion is expected in January 2001 and net cash proceeds will be used to reduce Group indebtedness.

n the year to December 31, 1999 the Chlor-Chemicals, Klea and Crosfield businesses generated combined sales of £722m, operating profits of £3m and an operating cash outflow of £53m. The businesses had total assets less current liabilities of £387m as at December 31, 1999 including ICI’s investment in EVC.

On a pro-forma basis, had they occurred at the beginning of 2000, these transactions in aggregate would have enhanced ICI’s earnings by 8%.

Gerd Löbbert joins Borealis Executive Board

Read news

Commenting on the agreement, ICI Chief Executive Brendan O’Neill said: “The transformation of ICI is essentially complete – a colossal undertaking over the last 3 years. Following the divestments announced today, significant earnings and cash flow volatility will be taken out of our results. The ICI management can now focus on converting the abundance of inherent opportunities we have into profitable growth.”

ICI was advised in these transactions by Goldman Sachs International.

Klea and Crosfield

Klea is one of the leading providers of fluorine-based products that are used most commonly to replace CFCs and HCFCs across a wide range of applications. Klea is a global business with a significant market share and customer base, and has a total of 390 employees.

Crosfield is one of the leading global manufacturers of products derived from silica and alumina, with significant global businesses in silicates, zeolites and silicas. Crosfield’s products have applications as ingredients or process aids in detergents, paper, civil engineering, beverages, personal care, surface coatings and plastics, and the company has leading positions in a number of key markets and technologies. Crosfield has a total of 1,100 employees worldwide.

Ineos has agreed to acquire ICI’s Klea and Crosfield businesses for a consideration of £300m, £250m of which will be paid in cash on completion with a further £50m cash expected no later than March 31, 2001, subject to usual working capital and other adjustments.

In order to fulfil its obligations under the agreement, ICI has agreed to procure certain third party interests and will discharge certain related liabilities. This will result in ICI’s net debt increasing by around £70m.

Overall, the divestment is expected to result in a reduction of net debt in 2001 of about £150m. Legacy payments with a net present value of about £20m are expected in the longer term.

Chlor-Chemicals

Chlor-Chemicals is one of the major chlor-alkali producers in Europe and a global leader in chlorine derivatives. The business is serviced by production sites in the UK, France, Germany and Thailand and has a total of 2,300 employees worldwide.

ICI will take a 15% shareholding in a new company established to purchase the Chlor-Chemicals business (“Ineos Chlor”). The ICI shareholding, which ICI expects to hold for at least 5 years, will be subject to pu

https://www.chemeurope.com/en/news/480/divestment-of-ici-s-chlor-chemicals-klea-and-crosfield-operations.html