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Letter to the Editor

Akzo Nobel Buys Ferro Unit

Dutch chemical group Akzo Nobel NV has agreed to buy the American and Asia Pacific powder coatings businesses of U.S.-based Ferro Corp. The value of the deal was $73 million, Akzo said in a statement.

"This deal resolves a major strategic gap in our global powder coatings business," said Akzo Nobel board member Rudy van der Meer. "We are already one of the world's market and technology leaders in this important growth sector of coatings, with strong positions in many countries, but our existing U.S. powder operations are relatively small."

Chief Financial Officer Fritz Frohlich said last month that Akzo would continue to expand in coatings, though he said a previously-stated ambition to double the sales at coatings within five years now looked too ambitious.

Weakness in coatings and chemicals forced Akzo to revamp those units last year.

Frohlich said in the statement that the acquisition did not interfere with Akzo's commitment to further reduce its debt by at least 200 million euros by year-end.

Ferro Corp posted total sales for its powder coatings businesses in the Americas and Asia Pacific of $100 million in 2001, Akzo said.

The acquisition is subject to approval by competition authorities in the United States.

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