Courtaulds deal approved

THE European Commission is expected on Tuesday to give the nod to Dutch giant Azko Nobel's pounds 1.8bn purchase of the UK chemicals and fibres group Courtaulds, according to industry sources. European Union Competition Commissioner Karel Van Miert is set to approve the deal, announced in April, provided Azko sells some of its aerospace coatings business. Currently the two companies combined have around 80 per cent of the world market in paint for aeroplanes. The sale of aeronautics coatings is expected to contribute around pounds 120m to Courtaulds' earnings this year.

"It is the main area where there could be a competitive overlap between the two companies," said a Courtaulds source.

The Commission's early approval last week of the deal will take away the threat of a deeper, lengthier probe of the merger by EU anti-trust watchdogs. If successful, the purchase of the London-based company would make Akzo Nobel the world's biggest paint maker with an estimated 15 per cent of the world market.

On Thursday Akzo Nobel said it controlled 59.3 per cent of Courtaulds' shares and again extended its 450 pence-a-share offer for the company to 10 July. Akzo Nobel has also either purchased or agreed to buy about 40.5 million shares on the market, giving it control of the UK company.

Earlier this month Akzo Nobel agreed to sell two US units of Courtaulds to the PPG Industries of the US, which has also expressed interest in buying the whole company.