Henkel takes further step towards acquisition of National Starch businessese

Düsseldorf, (PresseBox) - Henkel has reached an agreement with Akzo Nobel on the value of a back-toback transaction. The transaction envisages that Henkel will acquire the adhesives and electronic materials businesses of National Starch, a subsidiary company of ICI. The agreed transaction value is 2.7 billion GBP (close to 4 billion euros). The signing of the back-to-back agreement is still subject to the approval of the Henkel Shareholders’ Committee. The transaction is conditional on the successful completion of the takeover of ICI by Akzo Nobel.

“With this agreement, we have taken a major step towards the successful conclusion of the planned acquisition. We consider the agreed transaction value to be a fair price, since the new businesses offer exceptional complementarity with our portfolio,” says Ulrich Lehner, Chairman of the Management Board of Henkel. “Moreover, we expect significant synergies and a substantial improvement of our growth and profit prospects to arise from the planned combination.”

Henkel KGaA and Akzo Nobel N.V., Arnhem, The Netherlands, have reached an agreement on the value of a back-to-back transaction on August 6, 2007. The transaction envisages that Henkel will acquire the adhesives and electronic materials businesses of National Starch and Chemical Company, Bridgewater, N.J., USA, a subsidiary company of ICI plc, London, UK. The transaction value of these businesses is 2.7 billion GBP (close to 4 billion euros). Signing of the agreement on the back-to-back transaction is still pending. It is intended to execute the agreement, which is still subject to the approval of the Henkel Shareholders’ Committee, immediately prior to the announcement of a formal offer by Akzo Nobel for ICI. The transaction is conditional on the successful completion of the takeover of ICI by Akzo Nobel.

With this acquisition, Henkel would strengthen its existing leading position in the global adhesives market, particularly in the industrial business. The National Starch businesses to be acquired realized sales of about 1.26 billion GBP (about 1.85 billion euros) in 2006 and would increase sales of the Adhesives Technologies business sector to approximately 7.3 billion euros - around half the total sales of Henkel.

Strategic fit The businesses to be acquired from National Starch offer high complementarity with the existing Henkel portfolio of the Adhesives Technologies business sector. This applies with regard to the exceptional geographical and technological as well as market segment complementarity of the respective businesses.

Significant synergies Henkel expects significant synergies to arise from this combination of 240 to 260 million euros per year. The main portion would be derived from cost synergies. Due to the complementary businesses, Henkel also expects revenue synergies. Henkel anticipates that, following the closing of the acquisition and adjusted for restructuring costs, the transaction will be earnings accretive in the first year.

Solid financing structure
To finance the acquisition, Henkel is considering a combination of debt and/or equity capital and/or the possible divestiture of non-core assets. It is Henkel's declared aim to retain a rating in the “A” category. The planned acquisition will improve Henkel’s cash flow position enabling a rapid reduction of debt despite the associated restructuring costs.

Henkel AG & Co. KGaA

For more than 130 years, Henkel has been a leader with brands and technologies that make people's lives easier, better and more beautiful. Henkel operates in three business areas – Home Care, Personal Care, and Adhesives Technologies – and ranks among the Fortune Global 500 companies. In fiscal 2006, Henkel generated sales of 12.740 billion euros and operating profit of 1,298 million euros.
Our 52,000 employees worldwide are dedicated to fulfilling our corporate claim, "A Brand like a Friend," and ensuring that people in more than 125 countries can trust in brands and technologies from Henkel.

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