ICI pays $290m to Grow in US paint
Grow's directors have recommended ICI's tender offer, pitched at $18.10 a share. They also agreed to the sale by Corimon, a Venezualan corporation, of its 25 per cent stake in Grow for $17.50 a share.
John Danzeisen, the chief executive of ICI's North American paint operation, said: "ICI views the merger as an extremely good fit. We believe Grow's valued paint brands and distribution network will complement ours."
ICI became a big player in the $18bn North American paint market in 1986 with the acquisition of Glidden Paints for $500m.
Last year it expanded the operation, buying California-based Decratrend Paints, bringing the division's sales to around $1bn a year.
The acquisition will add 150 company-owned outlets to Gliddens existing 450 in geographically complementary locations. Grow had sales of $402m in the year to last June and profits of $14m.
Following the acquisition of a Los Angeles-based coatings and chemicals business, sales are expected to exceed $500m this year.
Four-fifths of sales come from architectural paints supplied to professional painters as well as big industrial and government accounts. The company also sells heavy-duty coatings for tankers and fishing boats, petrochemical plants and oil rigs.
There is an automotive division providing adhesives, sealants and speciality coatings, a household and laundry products arm and an aerosol spray paint maker.
The Grow acquisition is the first since ICI announced a surge in first- quarter profits last week from £93m to £221m. Earnings per share almost tripled from 6.1p to 17.5p.
Sir Denys Henderson, in his last announcement before retirement, said cost-cutting and productivity improvements had driven the rise in profits, more than offsetting the impact of raw material price increases.
Profits from the paints division at £14m were £3m below those for 1994 despite higher sales, volumes and prices as last year's highly competitive market continued into the first quarter.
The division, which has undergone several years of intensive change, has operations in North America, Europe and Asia Pacific, where sales growth is expected to be strongest.
Factories have been extended in Thailand, Taiwan and Australia and new sites added in Malaysia and China.
China is a fast-growing market for paint and last year 100 display centres were opened in Chinese towns and cities.
ICI's shares closed 1p lower at 754p.
- 1 Sabrina Corgatelli: US hunting tourist posts picture of herself with dead giraffe after Cecil the lion outrage
- 2 Dutch King Willem-Alexander declares the end of the welfare state
- 3 A-level results 2015: UK exam board OCR admits it 'estimates' hundreds of pupils' grades after papers 'go missing'
- 4 Giant Minion terrorises drivers in Ireland as 40ft inflatable blocks busy Dublin road
- 5 'Cool kids' can go on to become losers in later life, study finds
Sabrina Corgatelli: US hunting tourist posts picture of herself with dead giraffe after Cecil the lion outrage
'Gene drive': Scientists sound alarm over supercharged GM organisms which could spread in the wild and cause environmental disasters
Edward Heath 'child sex abuse' allegation: Investigation to be held into Wiltshire police handling of alleged claim in the 1990s
Labour leadership race: Jeremy Corbyn could be the next Prime Minister, says Ken Clarke
A-level results 2015: UK exam board OCR admits it 'estimates' hundreds of pupils' grades after papers 'go missing'
Is Britain really full up? Are migrants taking our jobs? Leading academic answers the most common anti-immigration claims
Calais Migrant Crisis: Deputy Mayor of Calais labels Cameron's use of 'swarm' as 'racist' and 'ignorant'
Chris Leslie: Jeremy Corbyn's anti-austerity agenda will harm the poor, says Labour shadow Chancellor
Landlords renting properties to illegal immigrants to face up to five years in prison
While we fixate on Calais, the Home Office is quietly deporting dozens of migrants on 'ghost flights'
Calais crisis: The seven claims made about the migrants - and the reality
iJobs Money & Business
£20000 - £25000 per annum + OTE £45K: SThree: SThree Group have been well esta...
£21000 per annum: Recruitment Genius: This is an exciting opportunity to join ...
Up to 70k DOE: Guru Careers: We are seeking an experienced Financial Director ...
£11000 - £50000 per annum: Recruitment Genius: This financial company offer ma...