ICI has reached an agreement to buy the Dulux business from South African corporation AECI for £52 million in cash.
In addition to buying the Dulux assets in South Africa, ICI is acquiring AECI's shares in the Dulux subsidiaries in Botswana, Zambia, Swaziland, Malawi and Namibia. Completion is expected in the second half of 2007, subject to approval by the regulatory authorities.
Dulux is one of the leading decorative paints brands in the growing South African market, where an expanding economy and a rapidly growing construction market have contributed to Dulux Pty.'s continuing sales growth. In the year ended 2006, Dulux Pty. sales grew 19% to £55.3 million, trading profits were £5.0 million (R70 million), net assets were £17.8 million (R249 million) and the business employed 650 people, including 400 in South Africa.
Accelerating profitable growth is one of ICI's strategic objectives, announced in February 2007. As part of this, a key performance indicator for the Group is to grow its revenues in developing markets, which already account for around a third of ICI's sales, at an average of three times the rate of growth of global GDP.