The twin strategy will remove ICI still further from its historic roots as a bulk chemicals manufacturer, taking the group into less cyclical markets and closer to the consumer.
The overhaul is the result of a group-wide review begun 18 months ago, shortly after Charles Miller Smith arrived from Unilever to take up the chief executive's job, and marks the biggest change at ICI since its demerger from Zeneca three and a half years ago.
Sir Ronnie Hampel, ICI's chairman, said: "ICI was formed by merger 70 years ago. Today's deal creates nothing less than a new ICI for the new century."
It emerged yesterday that ICI had, in fact, made a pre-emptive bid for the businesses more than a year ago. Although this was rejected by Unilever's chairman, Niall Fitzgerald, it left ICI well placed to move quickly when he put the division up for sale after all late last year.
ICI beat off competition from rival bidders Akzo Nobel of the Netherlands and Dupont of the US, although it insisted the $8bn (pounds 5bn) price tag eventually agreed was not materially higher than its initial offer.
The deal is being financed entirely with debt and will leave ICI with borrowings of pounds 5.6bn and result in a goodwill write-off of pounds 3bn-pounds 3.5bn. ICI said the acquisition would enhance earnings almost immediately and pledged it would grow the new businesses at a considerable faster rate than the 6-7 per cent a year achieved by Unilever.
The City welcomed the deal, marking ICI shares 43p higher to 757.5p. "It's a bold move but definitely a move in the right direction," one said analyst.
Unilever's speciality chemicals division consists of four businesses supplying starches, flavourings, fatty acids and silicates to a huge range of industries from hygiene and packaging to electronics, food and drink. It employs 15,000 people world-wide and made operating profits last year of pounds 357m on sales of just under pounds 3bn.
The disposal programme will raise an estimated pounds 3bn over three years compared with an original target of pounds 1.5bn and will see the group dispose of its 62 per cent stake in ICI Australia - valued at pounds 1.1bn - and the Tioxide white pigments business.
The biggest of the four businesses ICI is buying is the US-based National Starch, one of the world's leading industrial adhesive and speciality starch producers with sales of pounds 1.5bn. National Starch makes the coating for the latest Pentium chip.
The other businesses are the Dutch-based Quest, the world's leading fragrance and flavouring company, Unichema, which also has headquarters in the Netherlands and makes fatty acids, and Crosfield, which makes speciality chemicals for use in the detergents, drink, hygiene and paper industries.
The only businesses that is complementary is Unichema, which will be subsumed into ICI's existing performance chemicals business. This means there will be little in the way of cost savings to be achieved.
However, Mr Miller Smith said that the deal would provide ICI with a tremendous platform for growth through the blend of its technological and process engineering know-how and geographic spread and Unilever's marketing skills.
Crucially also, the businesses had been unable to win orders from rival consumer product groups under Unilever. Intra group sales accounted for 10 per cent of turnover.Reuse content