AkzoNobel today announced that it has received a binding offer for the purchase of its Building Adhesives business by Sika AG for € 260m. Building Adhesives generated annual revenues of € 185m in 2012.
The transaction, which is expected to be completed in 4Q13, is subject to regular consultation with employee representatives, will see all of Building Adhesives' approximately 550 employees as well as its two manufacturing facilities in Rosendahl (Germany) and Damville (France) and its products and brands transfer to Swiss-based Sika AG.
The intended sale of Building Adhesives follows a strategic review of the business' fit within AkzoNobel's portfolio. Building Adhesives is a standalone business within AkzoNobel's Decorative Paints business area, primarily serving the professional market in North Western Europe with a portfolio of brands and products including floor and wall leveling compounds, floor adhesives, tile setting, sealants and floor finishes. Its respected brands include Schönox, Casco, Cégécol, Synteko and EriKeeper. AkzoNobel's Wood Finishes and Adhesives business (which also operates under the Casco brand) is not the subject of this offer.
Our View & Conclusion:
This is fairly small news versus the total size of the company. The announcement nevertheless shows that the new CEO continues to scrutinize the portfolio looking for optimization opportunities. We maintain our Accumulate rating and € 53 TP.