Lancashire Cotton Corporation - The Final Days

The Final Days

Imperial Chemical Industries (ICI) and Courtaulds were major players in the textile industry, who had been discussing merger and then attempted take-overs. These failed. Courtaulds returned to its plans for reorganising the textile industry. The company has said that by the early 1960s it was becoming increasingly apparent to it that the provisions of the Cotton Industry Act 1959 were insufficient to ensure the future and strength of all sectors of the textile industry; new capital and management were needed to achieve re-equipment and re-organisation into the different and more stream-lined groups essential if the industry was to become economically viable.

In the autumn of 1962, Courtaulds conceived a plan which it called its Northern Project and it entered into negotiations with five major textile groups, namely Lancashire Cotton Corporation, Combined English Mills (Spinners), English Sewing Cotton Company, Fine Spinners & Doublers and Tootals. It was at first envisaged that Courtaulds would acquire the five companies but this was later modified to a scheme whereby the five would exchange their existing shares for shares in a new joint company and Courtaulds would buy shares in the new company by providing relatively large amounts of cash to finance re-equipment. The Board of Trade were informed of the intended re-grouping. Between December 1962 and April 1963 Courtaulds, ICI and the five textile companies concerned together examined the Northern Project in detail, but a financial agreement was not reached.

ICI and Courtaulds then pursued different policies in acquisition, and between July and August 1964 Courtaulds acquired the whole of the equity capital of Lancashire Cotton Corporation and Fine Spinners & Doublers, becoming thereby the owner of 30% of the spinning capacity of the Lancashire textile industry.