CHEMICALS group ICI has clinched a £260m deal to sell its North-East catalyst business Synetix.

The group is selling the Teesside business to chemicals and precious metals group Johnson Matthey, as reported in The Northern Echo yesterday.

The 400 staff at Synetix's headquarters in Billingham, along with a further 170 in Clitheroe, Lancashire, will all be transferred to the new owners.

Proceeds from the sale, totalling £210m, will be used to reduce ICI's debt, which at the half- year stage stood at a massive £2.3bn.

Shares in ICI rose two per cent following the deal. Analysts had forecast the catalyst business would be sold for between £200m and £250m.

Chief executive Brendan O'Neill said: "The agreement represents excellent value for ICI and its shareholders, confirming our expectations when we announced our intent to sell the business."

News of the sale has been welcomed by unions, which are due to meet the new owners tomorrow.

A spokesman for the TGWU said: "This deal will provide long- term job security for the workforce at Billingham and in Lancashire. There are no concerns about jobs."

ICI put Synetix, seen as a jewel in the crown of its businesses, up for sale in January, and at the same time it announced plans to raise £800m with a rights issue in order to reduce debts.

The sale follows ICI's transformation from a high volume chemicals firm into a global speciality products and paints business, which saw it cut 1,300 jobs in November.

Synetix makes catalysts - mainly for the petro-chemicals industry - where its products are used in refining. Its turnover last year was £143m.

Johnson Matthey, with sales from catalysts and chemicals last year of £1.3bn, already has a larger market share than ICI and has been hunting for further acquisitions.

The deal will be completed by the end of this year.