AMSTERDAM (AP) — Dutch paintmaker Akzo Nobel NV said Monday it has agreed to sell its starches arm to U.S.-based Corn Products International for around $1.3 billion.
Akzo Nobel acquired the starches business, which operates under the name National Starch, as part of its 2008 acquisition of British paintmaker ICI and did not consider it part of its core business. Akzo Nobel is the world's largest maker of paints and industrial coatings.
Westchester, Illinois-based Corn Products International will pay cash and also assume employee obligations such as pensions. The companies did not quantify those extra costs for CPI beyond the sale price in a joint statement Monday.
National Starch had 2009 revenue of $1.2 billion, 2,250 employees and operates plants in eight countries.
CPI said it expects National Starch to increase its offerings of ingredients and specialty starches. The starches CPI is buying are used in a wide range of products, notably processed foods, including cereal, baked goods, drinks, batters, dairy products and infant foods.
"The acquisition of National Starch represents an exceptional opportunity for Corn Products International and a significant step forward toward achieving our strategic goals," said CEO Ilene Gordon.
"The acquisition aligns with our strategic priorities to grow our ingredient portfolio, increase our presence in priority food processing segments" and win new customers, she said.
Akzo Nobel CEO Hans Wijers said the deal would strengthen the company's balance sheet and leave it "well positioned to capture growth both organically and by selected acquisitions."
Akzo Nobel shares rose 1.9 percent to euro45.93 in Amsterdam trading.
The companies said they expect the deal to close in the third quarter, pending approval from regulators.