Akzo Nobel Acquires Ferro Powder Coatings in Americas and Asia Pacific for $73 Million.

Business Editors

TRAVERSE CITY, Mich.--(BUSINESS WIRE)--Aug. 8, 2002

Akzo Nobel Coatings has signed a contract with Ferro Corporation to acquire its powder coatings businesses in the Americas and Asia Pacific for $73 million.

Based in Cleveland, Ohio, Ferro posted total sales for its powder coatings businesses in the Americas and Asia Pacific of $100 million in 2001.

"This deal resolves a major strategic gap in our global powder coatings business," said Rudy van der Meer, member of the Akzo Nobel board of management responsible for coatings. "We already are one of the world's market and technology leaders in this important growth sector of coatings, with strong positions in many countries, but our existing U.S. powder operations are relatively small."

"The acquisition of Ferro gives us a top three position in the single largest powder market in the world and also gives us a stronger platform for servicing our global customers. It builds on our existing business in Mexico and our existing strengths in Korea and China."

The $73 million value of the transaction is free of cash and debt, Fritz Frohlich, Akzo Nobel's chief financial officer, said. "Funds for this transaction are included in our 2002 plan and the acquisition does not interfere with our commitment to reduce our debt by at least $200 million by year-end."

Bill McPherson, general manager of Akzo Nobel's powder coatings business unit added: "This acquisition is an excellent strategic fit with our existing businesses and strengthens our commitment to the global automotive market. Ferro is a leading supplier to a wide range of industrial sectors, including the U.S. automotive and appliance powder markets, where it has preferred supplier positions and approvals with top users of powder coatings in both sectors."

Under the terms of the deal, Akzo Nobel will take over all of Ferro's powder operations in the United States, including factories in Nashville, Tennessee, and Brecksville, Ohio, and development and management facilities in Cleveland, Ohio. In the Asia Pacific, the deal includes Ferro's powder coatings operations in Ningbo, China, and its joint venture interests in Ulsan, South Korea. In total, 540 people will transfer to Akzo Nobel.

Akzo Nobel, based in the Netherlands, serves customers throughout the world with health care products, coatings and chemicals. Consolidated sales for 2001 were approximately $14 billion. The company currently employs over 67,000 people in 80 countries. Financial results for the third quarter will be published on October 23, 2002.

Akzo Nobel manufactures thermosetting powder coatings at more than 20 facilities around the world. The business operates under the common global business brand of Interpon(R) Powder Coatings. Interpon products are marketed to architectural metal, automotive components, domestic appliance, and a range of industrial market sectors, including metal furniture and IT equipment. Applications for Resicoat(R) products include anti-corrosion protection for pipeline, valves and fittings, reinforcing steel (rebar), as well as electrical insulation for a range of electrical and electronic component industries.