ICI swap deal 'finely balanced'

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The Independent Online
IMPERIAL Chemical Industries yesterday said it remained optimistic of going ahead with a pounds 350m asset swap with Du Pont of the United States, even though the European Commission's merger authorities are expected to block the deal.

The EC's Mergers Task Force is expected to recommend that the Competition Commissioner, Sir Leon Brittan, veto the deal.

The deal involves ICI swapping its worldwide nylon interests for Du Pont's acrylics business and pounds 250m in cash.

However, the EC's advisory committee on mergers, which is composed of representatives of the community's member states, is thought to have supported this recommendation by only a narrow majority, while the deal is favoured by the EC's industry directorate.

If the asset swap is vetoed it could put 6,000 jobs at risk at ICI's nylon plants in Britain and Germany.

Opponents of the swap deal believe that it should be blocked on the grounds that it would allow Du Pont to increase its share of the nylon carpets market within the EC.

But ICI has argued that the deal should be judged against the market for all artificial carpet fibres.

'As we understand it, the matter is finely balanced. We believe it is a good deal for both companies and for the industry in Europe as a whole, and remain optimistic it will go through,' a spokesman said.

A decision on the deal from the commission is expected by the end of the month.

Given the split on the advisory committee, Sir Leon may find it difficult to recommend that the deal be vetoed.