US based chemical company Huntsman has announced that it will acquire the businesses with a total value of $2.8bn (£1.7bn).

The proceeds will be used to reduce ICI's debts.

The sale will make Huntsman the third largest petrochemical business in the United States after DuPont and Dow and the biggest privately-owned chemical company in the world.

The bid ends ICI's long search for a buyer, after earlier deals were blocked by competition authorities in the United States.

In a press release Huntsman said it would purchase from ICI:

• polyurethanes business, with its three manufacturing sites in the UK, the Netherlands, and Louisiana;
• titanium dioxide business, including companies in North America, Europe, Malaysia and South Africa;
• aromatics business;
• its share of Olefins production from the cracker at Wilton, Teesside.

The deal will affect 7,000 workers in 15 countries, including 1,900 in the UK. The businesses being sold have sales of £2bn ($3.2bn) and profits of £120m. UK plants affected include Wilton, North Tees, Billingham, Greatham, Grimsby and Shepton Mallet.

Huntsman is Mormon-owned

Charles Miller Smith, chief executive of ICI said: "We are selling operations with leading market positions, good management and a strong track record of achievement. We are confident these businesses, their customers and employees will prosper under their new ownership."

ICI in difficulties

ICI has been trying to exit from the bulk chemicals market for some time, moving into the more profitable speciality chemicals business.

In 1997 it purchased Unilever's food flavourings and fragrance business for £4.5bn ($8bn).

But it has not been able to sell off its bulk chemicals fast enough, leaving it with huge debts and poor profits as the Asian crisis hit its business.

Bulk chemicals = low profits

In February the company, once the bellwether of British industry, reported profits down by 16% and debts of £4.2bn, more than its stock market value.

The company employs 67,000 people in 30 countries, making everything from Dulux paint to explosives to plastic films.

ICI says the deal will reduce its debts by £1.3bn, and that is has now sold businesses worth £5.2bn.

It also plans to sell its acrylics business, worth £500m, which Huntsman will have exclusive rights to buy.

Under the terms of the deal, ICI agreed to maintain a £300m stake in a new holding company, to be called HICI, which will purchase the businesses, for a minimum of three years. The new company would also include Huntsman's propylene business, based in Texas.

ICI shares were up 10.5p to 646p on the news.