Akzo Nobel Set to Sell ROVIN Stake to Shin-Etsu.

ARNHEM, the Netherlands--(BUSINESS WIRE)--Oct. 8, 1998.--Akzo Nobel N.V. announced today that it has signed a Letter of Intent with Shin-Etsu for the sale of its 50- percent interest in the PVC joint venture ROVIN v.o.f.

Akzo Nobel owns ROVIN together with Shell. In March 1998, both Akzo Nobel and Shell confirmed that they were considering their options, including divestment, for their vinyl's business. Since then, intensive talks have been held with a number of interested parties.

Shin-Etsu, Shell and Akzo Nobel have signed a Letter of Intent to allow for a period of exclusivity to agree the final terms of the sale of the totality of ROVIN. The Letter of Intent also envisages the purchase by Shin-Etsu of other Shell PVC/VCM businesses in Europe.

"We are very pleased that we have been able to find, in good consultation with Shell Chemicals, a strong player like Shin-Etsu," said Rene Scheffers, General Manager of Akzo Nobel Base Chemicals. "Shin-Etsu will not only strengthen the position of ROVIN but also of our chlor-alkali business on the Rotterdam Botlek site. We will continue to supply chlorine under a long-term agreement and the Vinyl Chloride Monomer-plant will remain available for the recycling of hydrochloric acid returned by our main customers."

The parties intend to finalize the contractual details of the sales agreement in the next few months, which will be subject to approval by all relevant government and competition authorities including the European Commission. Works councils will be asked for advice and local staff will be consulted as appropriate. More detailed information will be provided if and when the transaction has been completed.

Akzo Nobel's rationale for the divestment is its need to focus on businesses in which it has or can achieve a leadership position. Shin-Etsu is a world-leading producer of PVC and enjoys strong manufacturing positions in Japan and the U.S. Both Akzo Nobel and Shell are convinced that Shin-Etsu will be better placed to develop the ROVIN business due to their strategic fit. Shin-Etsu is an international chemical company with headquarters in Tokyo, Japan. Some of the major businesses of Shin-Etsu are PVC, semiconductor silicon, synthetic quartz, organic silicones, rare earth magnets. Shin-Etsu is a leading global producer in each of these businesses. The acquisitions of the VCM/PVC businesses in Europe are a natural strategic fit for Shin-Etsu as they continue to expand in the global PVC markets. Through this acquisition Shin-Etsu would attain a new 600 kt/a PVC position in Europe in addition to 550 kt/a in Japan and 1450 kt/a in the United States and 150 kt/a in Portugal.

Akzo Nobel, headquartered in Arnhem, The Netherlands, is a market driven and technology based company, serving customers throughout the world with healthcare products, coatings, chemicals, and fibers. The company employs 70,000 people and has activities in 60 countries. In 1997, consolidated sales aggregated $12 billion (24.1 billion NLG). In North America the company employs more than 9,000 employees and has annual sales of approximately $3 billion. The company's ADRs are traded on NASDAQ under the AKZOY symbol.