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Joyce to finalise sale of foam businesses

By Jacqueline McGarry, UT Australia BureauPerth, Australia-Joyce Corporation Ltd expects to finalise the sale of its polyurethane and polystyrene businesses to India’s flexible polyurethane foam manufacturer Sheela Foam Private Ltd by the end of November.Perth-based Joyce reached agreement with Delhi-based Sheela to sell the businesses for A$16 million ($12 million), excluding property and debt. The sale will result in a gain on net assets of about A$5 million. The consumer and industrial foam businesses will become a wholly owned Australian subsidiary of Sheela and will be named Joyce Foam Pty Ltd.The sale agreement follows the Australian Competition & Consumer Commission’s (ACCC) refusal in March to allow a merger between Joyce’s foam divisions and Melbourne-based Pacific Brands Ltd (UT Feb/March 2005, April/May 2005). The ACCC opposed that merger, claiming it would result in Pacific Brands having too much market power.The Joyce foam products business accounts for 35 percent of the Australian flexible polyurethane foam market and Sheela holds 35 percent of the Indian market. Sheela is trying to expand its foam businesses throughout Australasia.The sale is subject to shareholder approval on 29 November and Joyce intends to use the funds to “aggressively pursue” its development of Perth-based bed and bedroom furniture company Bedshed Franchising Pty Ltd, in which Joyce holds a 49 percent interest.Joyce’s net profit after tax for the year to June 30, 2005, was A$2.433 million, 4 percent higher than the previous year’s result.”

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