Akzo hints at break-up with €500m divestment plan

Related tags Pharmacology Drug Pharmaceutical drug

Netherlands-based drugs, coatings and chemical maker Akzo Nobel has
announced a €500 million divestment program and suggested that it
is unlikely to remain a player in all three of these sectors in the
long term.

Netherlands-based drugs, coatings and chemical maker Akzo Nobel has announced a €500 million divestment program and suggested that it is unlikely to remain a player in all three of these sectors in the long term.

Akzo also said that a cost-cutting plan designed to save around €120 million is already underway at the firm, adding that the number of employees in its pharmaceutical division will be reduced to under 21,000 by year-end. The firm's pharmaceuticals activities are considered by some drug analysts to be too small to compete on the global stage with its rivals.

Acknowledging the difficulties in the business, newly-appointed chief executive Hans Wijers said the moves were "a normal part of doing business in a high-risk, high-reward environment,"​ adding "to create room for manoeuvre we decided on the divestment programme [and] took some clear decisions about a roadmap to fix pharma."

Last year, Akzo reported a group decline of 4 per cent in net earnings to €892 million and ex-CEO Cees van Lede warned that "2003 will be a tough year,"​ acknowledging that its pharmaceutical business, which saw earnings slump 20 per cent in 2002, was "temporarily under pressure"​. For the full year, the pharmaceutical business, which comprises Organon, Intervet and Diosynth, showed slowing growth.

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