Akzo, Henkel shares dip on financing worry: traders

AMSTERDAM (Reuters) - Shares in Dutch chemicals group Akzo Nobel (AKZO.AS) fell more than 7 percent on Thursday on concerns that Germany's Henkel (HNKG_p.DE), its partner in the takeover of Britain's ICI Plc ICI.L, would have trouble financing its part of the deal, traders said.

Akzo Nobel shares were trading 7 percent lower at 53.00 euros at 11:15 a.m. EDT, after earlier hitting 52.56, while consumer products group Henkel was down 2.9 percent at 35.00 euros in Frankfurt. ICI shares were down 3.1 percent in London at 616 pence.

Akzo has agreed to buy Britain's ICI for 8 billion pounds ($15.90 billion) to boost its position as the world's biggest industrial coatings maker.

Markets fell across Europe, with Amsterdam's blue-chip AEX index .AEX down 3 percent, Germany's DAX .GDAXI down 1.9 percent and the FTSE 100 .FTSE down 3 percent.

"There are rumours that Henkel can't get financing and that's the reason why there's fear in the market that Akzo will have to finance the ICI deal alone," said Gert-Jan Geels of Eureffect.

An Akzo Nobel spokesman said that Akzo's deal to buy ICI was on track to close this year, with a side deal to sell part of ICI to Henkel due to close in the first half of 2008.

"Akzo has an unconditional deal with Henkel, and it is important to reiterate that we expect to close this deal in the first half of 2008," said Akzo spokesman Tim van den Zanden.

Henkel said it was "absolutely sure" that it would be able to finance the planned acquisition of parts of National Starch from ICI, adding it was considering a combination of debt and/or equity and/or sale of non-core assets to pay for the deal.

ICI was not immediately available for comment.

In a side deal to the ICI acquisition, Henkel agreed to buy ICI's adhesives and electronic materials businesses for 2.7 billion pounds, conditional on Akzo buying ICI.

Akzo is paying for the deal with proceeds from the 11 billion euro ($14.82 billion) sale of its Organon drugs unit to Schering-Plough Corp (SGP.N).

Some traders also cited concerns that Schering-Plough could run into difficulties in paying for Organon, but Akzo's Van den Zanden said that deal was also unconditional and expected to close by the end of 2007.