ICI 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.
In 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%.
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.’