Akzo Nobel snapped up National Starch's parent company ICI in a £8bn deal in 2008, primarily to boost its scale in the high-growth coatings market. Specialty starches, while providing "attractive near term growth and margin potential", were not a core part of the business and an eventual sell-off was anticipated.
Interest in acquiring National Starch appeared to quieten down in the economic slump that followed October 2008, but in April 2010, it was announced that AkzoNobel had received renewed expressions of interest in the business.
Corn Products was recently tipped to be a contender, alongside other front runners Danisco and Associated British Foods.
For Corn Products, the move marks a big leap into new markets in Europe, as well as Australia and New Zealand. The combined company will have revenues of $5bn in revenues, and is expected quickly to bring cost synergies of $50m, mostly from manufacturing, procurement, logistics and admin functions.
The acquisition for $1.3bn plus around $100m in pension and employee liabilities is expected to close in Q3 2010, once the competition authorities are satisfied. It is expected to be accretive by the end of 2011.
Corn Products president and CEO Ilene Gordon said that as well as extending her company’s reach into new markets, the acquisition will give access to new technologies and improve scale and capabilities at locations where it already has a presence.
Other boosts will be in the product portfolio and technology the enlarged group has at its disposal. National Starch has a store of around 800 patents in specialty starches for food and other uses (its divisions beside Food Innovation are papermaking and biomaterials), has 2500 employees globally and 11 plants in eight countries.