Zeneca puts pounds 2bn price tag on chemicals arm
Friday 13 November 1998
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".
- 1 Benedict Cumberbatch says Hollywood is better for black British actors: 'I think as far as coloured actors go it gets really difficult in the UK'
- 2 Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
- 5 Warriors in ancient Iraq suffered Post-Traumatic Stress Disorder more than 3,000 years ago, say researchers
Rowan Atkinson to sell £10 million McLaren 'supercar' he crashed into a tree and a lamppost
UK weather: Snow to fall in the coming week with sub-zero temperatures to last until early February
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Warriors in ancient Iraq suffered Post-Traumatic Stress Disorder more than 3,000 years ago, say researchers
US blames Russia after rocket attacks in Ukraine kill at least 30
Nigel Farage: NHS might have to be replaced by private health insurance
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
British Muslim school children suffering a backlash of abuse following Paris attacks
George Galloway condemns 'racist, Islamophobic, hypocritical rag' Charlie Hebdo at freedom of speech rally
Islamic history is full of free thinkers - but recent attempts to suppress critical thought are verging on the absurd
iJobs Money & Business
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...
£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...
£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...
£35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...