Akzo CEO Says a PPG Merger Could Present Problems
May 08 2017 - 1:53PM
Dow Jones News
By Andrew Tangel and Christopher Alessi
The chief executive of Dutch paint maker Akzo Nobel NV said
customers are skeptical of a tie-up with a chief rival that might
leave less choice for key paints and coatings.
"I have spoken to customers who have expressed concerns," Akzo
Chief Executive Ton Büchner said in an interview Monday after Akzo
rejected a $27 billion takeover bid from PPG Industries Inc. "There
is certainly areas where the choice will be reduced, and that's of
course what the regulatory bodies will study very carefully."
Mr. Büchner said regulators may require both companies to shed
segments before such an acquisition could create the world's
largest paints and coatings maker. Akzo's rejection of PPG's latest
offer sets up a potential hostile bid by the Pittsburgh
company.
Mr. Büchner said employees in Akzo's specialty chemicals
business have expressed "anxiety and insecurity" despite PPG's
assertions that it would guarantee their jobs. PPG has also said
local suppliers in the Netherlands and U.K. would still be allowed
the opportunity to keep up their sales to the combined company.
But Mr. Büchner questioned those commitments. He said they would
be enforceable in U.K. courts but not in the Netherlands.
"There are therefore many customary ways in the Netherlands to
make sure that some of these non-financial stakeholder matters and
the guarantees that people give are actually also secured," he
said. "But none of these very customary parts have been
proposed."
PPG representatives didn't immediately respond to a request for
comment. PPG has said it wouldn't raise its bid, but signaled that
it is preparing a public tender for Akzo. The company said earlier
Monday it would review Akzo's response.
Mr. Büchner declined to speculate about PPG's next move or how
Akzo might respond.
--Ben Dummett contributed to this article.
Write to Andrew Tangel at Andrew.Tangel@wsj.com and Christopher
Alessi at christopher.alessi@wsj.com
(END) Dow Jones Newswires
May 08, 2017 13:38 ET (17:38 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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