Dutch chemicals group Akzo Nobel has agreed to buy Britain's ICI for £8 billion to create the world's biggest paint maker and retain its lead in industrial coatings.
Akzo raised its bid twice to secure a deal but still has to win its shareholders' support and faces opposition from at least one major investor, US fund TPG-Axon, a source close to the fund said.
"They're spending all their cash at the top of the cycle...and I don't think now is the time to be buying a business with exposure to the US housing market," the source said.
TPG-Axon owns about 3.5 per cent of Akzo.
Akzo, whose coatings are used on Airbus's A380 superjumbo, said today it would pay 670 pence a share in cash for Imperial Chemical Industries (ICI), which makes Dulux paints. That is 22 per cent above ICI's closing share price on June 15th, the day before it announced a bid approach from Akzo.
Buying ICI will give Akzo a market-leading position in paint and also allow it to retain its lead in industrial coatings, which was under threat from US group PPG Industries' plans to buy Dutch rival SigamKalon for about $3 billion (£1.44 billion).