Akzo sells Tencel with Acordis to CVC (1999)

Akzo Nobel has welcomed a bid from UK venture capitalists CVC Capital Partners for its beleaguered fibres business Acordis.  CVC, backed by Acordis' management, has offered E825m ($889m) to acquire a majority stake in the fibres company. Akzo has the option to buy 20%.  Acordis chief executive officer Folkert Blaisse said: 'We back CVC's offer 100%. We trust that the transaction will be completed fast, effectively and efficiently.'

Akzo Nobel chairman Cees van Lede said: 'CVC's proposal fits our stated strategy of establishing Acordis as an independent company with a solid foundation.'

Akzo had previously sought to float or demerge Acordis, although Akzo was working on restructuring the business further before this went ahead (ECN 17 May).

Industry watchers said the price for the business was fair. Akzo can now concentrate on its other, more profitable businesses, while CVC could eventually resell Acordis or float it on the Dutch stock markets.  Mark Sullivan of Chase Manhattan bank, which advised CVC on the deal, said seeing the fibres market cycle through could be tough, but that 'CVC has taken on the challenge'. For Akzo, he said the deal was a 'clean strategic solution'.

Under CVC, Acordis will continue its strategy to build its portfolio of speciality fibres for niche markets to balance slim profits from the cyclical businesses that are undergoing restructuring.

Acordis and Austria's Lenzing have confirmed that the CVC bid does not affect their possible US viscose rayon joint venture, and that discussions continue.

Acordis incorporates the fibres businesses acquired by Akzo from Courtaulds, which have been a drain on Akzo's resources ever since.

16 August 1999 00:00 [Source: ICB]