In 1991 over 30 companies joined or left ICI, so Sir Denys Henderson, chairman, has many deals to consider. He chooses two. By Chris Blackhurst.
Think of a deal-maker and Sir Denys Henderson does not immediately spring to mind, Lord Hanson yes, and Lord Weinstock certainly, but not the chairman of ICI.
It's partly because of Sir Denys himself. A cautious, jolly, down-to-earth Scot, it took him 30 long years to scale the ICI ladder. Taking over from Sir John Harvey-Jones, his first decision was not to attempt to follow him. Sir John was never off television; Sir Denys's appearances have been rare.
Then there is ICI. A corporate giant that employs 130,000 people, produces 15,000 different items and has sales of over £1.5 billion a year spread across 150 countries, it has never gone in for flamboyant deals or showcase publicity.
Yet Sir Denys quietly oversees more acquisitions and disposals in a year than most other chairman see in a lifetime. In 1991, a quiet 12 months, over 30 businesses joined or left the group. At Sir Denys's first board meeting as chairman, in April 1987, ICI agreed to bid $1.9 billion for Stauffer, the US chemicals group, to buy a Belgian business and to bid for a company in Australia.
Asked for his best deal, he pauses. So much of his time is spent contemplating the future for the chemicals industry and mapping out ICI's future, that he thinks his best must still be ahead. "I believe you will see a radical restructuring in the chemicals industry during the next few years. All the components are there: low growth in the OECD counties; upheaval in the communist world and the emergence of major manufacturers in the Pacific." With technology becoming more and more expensive and environmental pressures increasing, the best way to share the burden is through joint ventures and mergers. "Big changes are coming which can only mean bigger deals to come, he says.
That said, there have been deals of which he is immensely proud. One was with Henderson as head of the board. The other was Henderson, the time-served ICI manager, being allowed to run his own show for the first time. There was some 18 years between the two.
His board room deal came in 1986. ICI was the number four or five in the world, and "wanting to be bigger" in agrochemicals. Then, Unilever's Stauffer subsidiary, and one of the largest players in the business, became available. Stauffer had been looked at before and rejected, because it covered much more than agrochemicals and ICI could not be bothered selling off the parts it did not want. Sir Denys spoke to Michael Angus, his opposite number at Unilever. "He agreed that the logical buyer was ICI but said that we couldn't cherry pick. If we wanted Stauffer, we would have to buy it all and get rid of individual bits." For once, ICI would turn break-up artist. In April Sir Denys obtained board approval to buy Stauffer for no more than $2 billion. By the beginning of June, the company was ICI's, for $1.9 billion. By the end of the year, the bits it did not want had been sold, for over $1.2 billion. ICI has made it to number two in the world in agrochemicals at a net cost of $700 million.
If Stauffer is his best deal as chairman, it is not the most satisfying in his career. That came in 1988, when he was made general manager, licensing and catalysts in the agricultural chemicals division. One of his department's biggest earners was selling the technology to make town gas. Unfortunately, as he arrived, natural North Sea gas was discovered. Luckily, his boffins had another trick up their sleeve: a low pressure methanol process. Until then everyone had used high pressure. He persuaded an American company to buy the first low pressure plant - together with the spares servicing and supplies. It was the first of many such orders.
It was the most formative period in his career. "I was doing something and making it happen. It was tremendous. My little bit only had 60 people. The agriculturals board was so obsessed with fertilisers it left us alone. Mind you, if I hadn't done so well we would not have been left so alone. It was the best job I've ever had."
It also helped keep his feet on the ground. "As you move up an organisation you always get away from the coal-face but because you've experienced what it's like you can appreciate people's problems more."
Chris Blackhurst is City editor of the Sunday Express.