Akzo Nobel is purchasing Ferro's powder-coatings operations in the Americas and Asia-Pacific, while Rohm and Haas is purchasing the operations in Europe. The transactions are valued at $160 million, including the assumption of certain liabilities by Akzo Nobel and Rohm and Haas, and are subject to regulatory approvals. Sales of Ferro's Powder Coatings unit were approximately $175 million in 2001.

With the deal, Akzo Nobel and Rohm and Haas's powder-coatings businesses will add to their dominant market positions in the segment. Industry sources say the companies are the biggest powder manufacturers in the estimated $3.6 billion global powder-coatings market, with Akzo Nobel ranking as the top producer in Europe and Rohm and Haas's Morton business holding that position in North America. Industry observers say further consolidation in the powder segment is a good possibility, due to slowing growth rates, the segment's fragmentation and profitability challenges.

Hector R. Ortino, Ferro's chairman and CEO, said that while the powder coatings business "has been an important part of our Coatings business segment, it no longer fits with the long-term strategy of the company." The sale reflects ongoing moves "to reposition Ferro's portfolio," he said.

Under the terms of the deal, Akzo Nobel will acquire manufacturing sites in Nashville, TN, and Brecksville, OH, and development and management facilities in Cleveland. In Asia-Pacific, the deal includes Ferro's powder-coatings operations in Ningbo, China, and its joint-venture interests in Ulsan, South Korea.

Rudy van der Meer, the member of member of the Akzo Nobel board of management responsible for coatings, said the acquisition "resolves a major strategic gap in our global powder coatings business," since the company's powder business in North America is "relatively small."

Under the sale agreement with Rohm and Haas, Ferro will sell manufacturing sites in the United Kingdom, Germany and Spain. The business supplies powder coatings to the automotive, construction, appliance, and general-industrial market segments in Europe.

Jim Swanson, vice president and Business Unit director of Rohm and Haas's Powder Coatings business, said Ferro's European powder coatings business will provide new opportunities for the company's specialty products, including low-temperature-cure technology, high-yield products, and thermoplastics. He said the acquisition is expected to increase the Powder Coatings division's sales to approximately $300 million.