Zeneca puts pounds 2bn price tag on chemicals arm

ZENECA, THE drug giant, yesterday put its specialty chemicals business up for sale with a price tag of up to pounds 2bn in a bid to focus on its pharmaceuticals and agrochemicals businesses.

The company said that it planned to sell Zeneca Specialties, which produces dyes for computer printers, colours, leather finishes and chemicals for drugs, to a single buyer by the first quarter of next year. Sir David Barnes said the rapid consolidation in the chemicals industry offered "the best long-term future for the business, its employees, customers and shareholders". Zeneca said it had received no offers for the business but industry analysts predicted that the announcement will trigger a bidding war among the world's largest chemicals groups. Bidders are likely to include Du Pont and Dow of the US, Laporte of the UK and the Swiss giant Clariant, formed earlier this week through an $8bn merger between Clariant and Ciba Specialty Chemicals.

The City welcomed Zeneca's decision to exit the highly-cyclical chemicals business to focus on its core drug and agrochemicals units. Shares in Zeneca, which have suffered because of the chemicals operation, soared 28p to 2,283p after the news of the proposal.

Industry experts said the divestment increased the chances of a sale of the agrichemicals business as Zeneca strives to improve the performance of its core drug-making business. The specialty chemicals division had sales of pounds 885m last year, a fraction of Zeneca's pounds 5.2bn turnover. Zeneca is set to retain Marlow Foods and two factories in Huddersfield and Grangemouth in Scotland.

Zeneca Specialties's performance has improved steadily since Zeneca's demerger from Imperial Chemical Industries in 1993, with margins rising from six to 10 per cent over the past four years.

Martin Evans, the head of research at stockbroker Sutherlands, said the division "is much better than it was. It has reasonably good margins and a very good market position. This is a good deal for Zeneca and a good deal for the industry".

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
10 best statement lightbulbs

10 best statement lightbulbs

Dare to bare with some out-of-the-ordinary illumination
Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

Briton pumped up for dream meeting with world No 1
Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

Nick Bollettieri's Wimbledon Files

It's time for big John Isner to produce the goods to go with his thumping serve
Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

Dustin Brown

Who is the German player that knocked Nadal out of Wimbeldon 2015?
Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

Damien Martyn: 'England are fired up again, just like in 2005...'

Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test