Akzo's £1.83bn, 450p a share, offer for Courtaulds is almost certain to go ahead following a decision by its main bidding rival, the US paints group PPG Industries, to call off its own offer for the group.

Akzo has been able to head off an all-out bidding war by forging a separate deal with PPG.

Courtaulds' share price performance had worn thin with investors

PPG has agreed to pay £175m for Courtaulds' packaging coatings and US decorative coating businesses.

PPG, and its financial partner Donaldson Lufkin & Jenrette Banking, will consider making another approach for Courtaulds if Akzo's bid fails.

Akzo said the businesses it had agreed to sell to PPG were insignificant to its overall strategy and represented less than 9% of Courtaulds total forecast sales for the year to March 1999.

Akzo now plans to spin off Courtaulds fibres business along with its own fibres operation.

Courtaulds was hived off from Courtaulds Textiles in 1993. It produces fibres, plastics and chemicals. The group's main long term hope is Tencel, the first new man made fibre to be created for more than 30 years which is already used to produce clothing ranges for retailers such as Marks & Spencer.

But Courtaulds shares have had a disappointing run in recent years, knocked by the financial crisis in Asia, intense competition in several of its markets and disappointing sales of Tencel.