NEW YORK, JUNE 22 -- Imperial Chemical Industries said today it will sell its Stauffer Chemical Co.'s speciality chemical unit for $625 million, more than a third of the price it paid for the entire Stauffer company earlier this month.
Akzo American Inc., a subsidiary of Holland-based Akzo NV, will pay $614 million in cash for the unit and assume about $11 million in long-term debt, Imperial Chemical spokesman Ray King said.
Imperial Chemical originally acquired Stauffer, headquartered in Westport, Conn., from the Anglo-Dutch multinational giant Unilever for $1.69 billion on June 5.
Stauffer was first acquired by Chesebrough-Pond's Inc. three years ago and became a part of Unilever when Chesebrough-Pond's was taken over by Unilever.
The Stauffer unit makes high-performance lubricants and flame retardants, catalysts for petrochemicals and additives for synthetic rubber manufacture.
The sale, which will include its research, manufacturing and marketing interests in the United States and worldwide, is expected to be completed in a "few weeks," King said. Some 1,800 employes will be affected, but it is not known whether the Dutch company will retain them after the deal is completed.
In London, Imperial Chemical Chairman Denys Hunderson said, "Akzo is a company that we know and respect. We believe the agreement we have reached is good for ICI, good for Akzo, and good for the speciality business of Stauffer and its employes."
Imperial Chemical acquired Stauffer mainly for its agrochemical business, which it needs for its expansion both in the United States and worldwide, the company said.
In what one analyst termed the "classic British-asset-stripping strategy," the decision to sell the speciality chemicals division will also help Imperial Chemical recoup more than a third of its outlay to Unilever for Stauffer.
The $625 million represents about two times the speciality chemicals division's current sales and about 17 times its earnings, which one analyst said appeared to be on the high side.
But since the transaction is in dollars, the Dutch firm might come out ahead because of the appreciation of the guilder against the dollar in recent months.
Anthony Pearce-Batten of Legg Mason Wood Walker Inc. of Baltimore said the acquisition should help Akzo increase its involvement in the United States at a time when several major foreign companies are trying to do the same.
Imperial Chemical also is seeking to sell Stauffer's basic chemicals business, which currently has sales of about $550 million, King said. He said "several parties" have expressed interest. King declined to put a price tag on the business.