The British and German chemical groups have reached a provisional deal and, subject to the approval of EC competition authorities, hope to finalise arrangements by the autumn.
They intend to pool their assets in a joint venture, with Courtaulds contributing plants in Grimsby and Barcelona and Hoechst putting in its operations at Kelheim in Germany. Each will receive shares in the new company in exchange and no cash will change hands.
No details of profits or asset value for the new venture have been disclosed, but in the year to March their combined turnover was pounds 369m, of which Courtaulds' operations generated pounds 238m. The joint venture, in which Courtaulds will own the majority of the shares, will employ 2,650 people - 1,025 in the UK, 450 in Spain and 1,175 in Germany.
The agreement is confined to their European rayon and acrylic fibre operations. Courtaulds' Tencel and US viscose businesses are excluded, as are Hoechst's aramid interests.
News of the joint venture came as Courtaulds announced better-than-expected pre-tax profits for the year to March, up 3.4 per cent at pounds 192.7m on turnover of just over pounds 2bn (pounds 1.9bn). The results were flattered by sterling's devaluation. The shares rose 19p to 541p.
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