FERRO EXITING POWDER COATINGS
Akzo Nobel and Rohm and Haas will split Ferro's global business
Ferro, a major force in powder coatings since 1974 and the fourth largest maker worldwide, has decided to quit the powder coatings industry.
For a total of $160 million--including working capital and other liabilities--Ferro has agreed to sell its U.S. and Asian powder coatings business to Akzo Nobel and its European operations to Rohm and Haas. Ferro will use cash from the sale to reduce debt. The deals should close before the end of September.
AKZO NOBEL PHOTO
Ferro CEO Hector R. Ortino says powder coatings, which are spray-applied and fused with heat, "no longer fit with the long-term strategy of the company." Instead, Ferro will concentrate on business sectors with greater growth potential, including electronic materials, pigments, and ceramics.
Akzo, already the world's largest powder producer, will see its U.S. position go from 10th to third, after Rohm and Haas and DuPont, says Derek Welch, Akzo strategy and planning director for coatings. With the deal, the Dutch firm gains powder businesses for automotive parts and appliances with annual sales of $100 million.
Akzo will acquire factories in Nashville, Tenn.; Brecksville, Ohio; and Ningbo, China. In addition, Akzo gets an R&D facility in Cleveland and a joint venture with LG Group in Ulsan, South Korea.
Rohm and Haas Vice President Jim Swanson says the deal "will give us a larger footprint in Europe to exploit our technology." Ferro has about $75 million in European powder sales to appliance, auto parts, and window-frame makers.
Rohm and Haas, the third largest global powder maker, already has one European plant, in Italy. But the Ferro acquisition will add facilities in the U.K., Germany, and Spain.