AkzoNobel rejects unsolicited takeover offer from PPG Industries
09 March 2017
Dutch paints and coatings giant AkzoNobel today rejected an unsolicited takeover offer from its US rival PPG Industries, saying that the $22-billion bid substantially undervalued the company and was not in the interest of its shareholders.
The Netherlands-based company also said that it would review strategic options for the separation of its Specialty Chemicals business which had revenues of €4.8 billion in 2016.
AkzoNobel today said that it has received an unsolicited, non-binding and conditional proposal from PPG for a public offer on all of the issued and outstanding ordinary shares in the capital of AkzoNobel at a price of €54.00 in cash and 0.3 PPG shares per AkzoNobel share, corresponding to a value of €83.00 per share as per 28 February, 2017 (cum final dividend 2016).
It added that its boards ''have unanimously ?concluded that the PPG proposal substantially undervalues AkzoNobel by failing to reflect the long-term value creation potential of the company.''
''The Boards have also concluded that the equity component of the proposal has significant issues, including the high leverage of the proposed combination. They also believe the proposal carries significant? delivery and timing risk for shareholders, both in relation to substantial anti-trust issues, pension schemes and the achievability of proposed synergies.''
AkzoNobel also said that the proposal is not in the interests of AkzoNobel employees and would create potential uncertainty for thousands of jobs worldwide, and added that it did not initiate nor has it encouraged or entertained any talks with PPG on this matter.
Bloomberg had yesterday reported that PPG Industries Inc., is exploring a potential deal that could involve buying all or part of AkzoNobel (See: PPG Industries explores potential deal with Dutch rival Akzo Nobel).
AkzoNobel said that it will consider various alternative ownership structures for its Specialty Chemicals business including, listed the unit?, since a separation will allow the unit to continue to build and accelerate its market-leading positions across a range of market segments.
Formed in 1994 through the merger of Akzo NV of the Netherlands, and Nobel Industries of Sweden, AkzoNobel is a leading coatings company whose key products include automotive coatings, specialised equipment for the car repair and transportation market and marine coatings.
AkzoNobel operates in more than 80 countries, and employs approximately 46,000 people.
Its brands include Dulux, Bruguer, Tintas Coral, Hammerite, Herbol, Sico, Sikkens, International, Interpon, Casco, and Pinotex among others.
AkzoNobel is the world's second-biggest paint company with a market cap of about $17 billion and annual revenues of around $16 billion.