LONDON -- Imperial Chemical Industries Plc. said it's in talks with Salt Lake City-based Huntsman Corp., the biggest private chemicals maker in the United States, and others to sell bulk chemicals assets as it revives its efforts to divest less profitable units.

ICI, Britain's biggest chemicals company, made its statement after the Financial Times reported ICI plans to sell units worth about $3 billion.A plan by ICI to sell its bulk chemicals units, stepped up after it bought the specialty chemicals division of Unilever NV for $8 billion in 1997, has gone awry in recent months as regulators raised antitrust concerns. Huntsman, which has annual sales of about $5 billion, may be a more suitable partner because it's smaller than industry leaders such as DuPont Co., which ended talks with ICI in January.

"If ICI's negotiations with Huntsman are successful and the regulators do not object, the deal would be good for ICI," said Philip Morrish, an analyst at Paribas.

But there is concern the U.K. chemical maker will again fail to complete a sale. In October, W.R. Grace & Co. decided against buying ICI's Crosfield unit for $455 million. In January, the U.S. Federal Trade Commission objected to ICI's plan to sell its titanium dioxide businesses to DuPont, the world's biggest producer of paint-pigment, and Houston-based NL Industries Inc. for $1 billion, citing U.S. antitrust concerns.

"If there's a chemical company out there that ICI hasn't talked to I would be very surprised," said Peter Blair, an analyst at Salomon Smith Barney in London, adding that a disposal of additional commodity chemicals assets would be "highly advantageous because it's a loss-making operation."

It wouldn't be the first time that Huntsman, run by founder Jon Huntsman, 61, would pick up the pieces that another company no longer deems a main business. In 1996, Huntsman agreed to buy some of Texaco Inc.'s chemicals units for $600 million, after buying Texaco Chemical Co. for $1.06 billion in April 1994.

View Comments

Huntsman last year agreed to buy Rexene Corp., based in Dallas, Texas, for $604 million including debt. Huntsman makes basic chemicals used to make plastic film, plastic packaging, foam and construction materials, among other products. Huntsman has made about 30 acquisitions in the past 15 years.

ICI said it made today's statement in response to a press report in the March 27 Financial Times, which reported ICI was in talks to sell 2 billion pounds ($3.24 billion) worth of assets to Huntsman. The sale could include ICI's petrochemicals unit, based in Teesside, England, and its Dioxide division as well as other businesses, the newspaper said.

ICI has sold billions of dollars worth of assets in recent years as part of a strategy to focus on specialty chemicals, a higher-margin business than its traditional mainstay of commodity, or bulk, chemicals. In the fourth quarter, ICI's earnings fell 43 percent, dragged down by bulk chemicals.

"As part of this continuing program, ICI has been in discussions with a number of companies, including Huntsman Corp.," said ICI. "Discussions are continuing, and no further statement will be made until they reach a conclusion."

Join the Conversation
Looking for comments?
Find comments in their new home! Click the buttons at the top or within the article to view them — or use the button below for quick access.