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[August 2002]
Ferro to Divest Powder Coatings Business
On 5 August 2002, Ferro Corporation (Cleveland, OH, USA) announced that it had signed a definitive agreement to sell its Powder Coatings business unit. The sale will consist of two separate transactions with Akzo Nobel and Rohm and Haas Company. Akzo Nobel is purchasing the operations in the Americas and Asia Pacific, while Rohm and Haas is purchasing the operations in Europe.The sale to Akzo Nobel includes two manufacturing operations and a research and development operation in the USA, plus two manufacturing operations in Asia Pacific. The sale to Rohm and Haas includes three manufacturing operations in Europe, in the UK, Germany and Spain.
Ferro's Chairman and CEO Hector Ortino said: "While the Powder Coatings business has been an important part of our Coatings business segment, it no longer fits with the long-term strategy of the Company. The business is clearly a better strategic fit for Akzo Nobel and Rohm and Haas, where there is greater opportunity for growth.
"This divestiture is an extension of the Leadership Agenda strategy we adopted in 1999 and represents our continued efforts to reposition Ferro's portfolio. As always in these situations, we are committed to a smooth transition for all the employees impacted by the sale."
The sale is valued at US$160 million for Ferro, including the assumption of certain liabilities by the acquiring parties. Sales for the Powder Coatings business were approximately US$175 million in 2001. The transactions are subject to normal regulatory approvals.
Rohm and Haas said that the European deal was being made for around US$60 million. It will incorporate the Ferro acquisition into its existing Powder Coatings business, headquartered in Reading, PA, USA. The acquisition is expected to see Rohm and Haas Powder Coatings division sales increase to approximately US$300 million.
ENDS