Ciba to the rescue in Colloids war
15 Jan 2000
Ciba Specialty Chemicals has stepped in as a 'White Knight' to rescue UK specialities firm Allied Colloids from the unwanted attentions of US competitor Hercules. After a frenetic bidding war, which saw Hercules lift its offer twice within one day, Ciba trumped Hercules' final bid of 195p per share (£1.35billion) with a 'knockout bid' of 205p (£1.42billion) equivalent to twice Colloid's share price in October, just before Hercules' first bid.
The acquisition is the first deal for Ciba head Rolf Meyer since his company was spun-off from Novartis, the result of the merger between Ciba Geigy and Sandoz. Meyer's interest stems from Colloids' core product, water treatment chemicals, a highly lucrative and fast-growing niche in the fragmented speciality chemicals market.
Meyer also sees significant growth potential in the Bradford-based business. Colloids has a reputation for innovative chemistry and technological leadership, he said; moreover, its profit margins are ahead of the average for Ciba's divisions. 'It will take a moment for the market to fully assess the attractions and prospects of this business,' he commented.
Ciba will absorb Colloids and make it the centrepiece of a sixth division, to be based in Bradford and headed by Colloids' current chairman, David Farrar, who will also join the Ciba executive committee. Colloids' products will be sold through Ciba's distribution network, which spans 117 countries.
