Akzo Nobel Rebuffs Raised $24 Billion PPG Takeover Approach -- Update
March 22 2017 - 5:35AM
Dow Jones News
By Ian Walker in London and Christopher Alessi in Frankfurt
Dutch paint and chemicals firm Akzo Nobel NV on Wednesday said
it had rejected a sweetened EUR22.37 billion ($24.19 billion)
takeover proposal from rival PPG Industries Inc., digging in its
heels in a trans-Atlantic standoff between the two industrial
giants.
The Amsterdam-based company said PPG's revised offer worth
EUR88.72 a share, which comes just weeks after its initial
EUR83-a-share offer, undervalues the company and doesn't warrant
engaging with its U.S. suitor.
The standoff comes amid a wave of consolidation in the chemicals
industry, including a $120 billion merger of U.S. giants Dow
Chemical Co. and DuPont Co. and Bayer AG's planned $57 billion
takeover of Monsanto Co., as the industry contends with weak growth
and overcapacity.
PPG's raised offer for Akzo consists of EUR56.22 in cash and
0.331 PPG shares a Akzo share. Its previous offer, announced and
rejected earlier this month, was EUR54 in cash and 0.3 PPG shares
for each Akzo share.
Akzo said a merger would lead to a large number of disposals
because of the major geographical and segment overlap of both
companies across decorative paints and performance coatings, and
would lead to significant job cuts.
The Dutch company also cited a "culture gap" between the two
firms.
"We are convinced that AkzoNobel is best placed to unlock the
value within our company ourselves," Chief Executive Ton Büchner
said, adding that the board is executing its plan, including the
creation of two focused businesses and new cost structure.
Akzo, which counts Dulux, Sikkens, Interpon and Eka among its
brands, said it was exploring separating its special-chemicals
division when it disclosed PPG's initial unsolicited offer.
Since then it has emerged that activist investor Elliott
Management Corp. owns a stake in Akzo and is pushing the company to
engage with PPG, The Wall Street Journal has reported. Elliott has
expressed concerns to Akzo management that it didn't engage with
PPG and that it didn't consult the hedge fund, which owns less than
3% of Akzo -- the reporting threshold in the Netherlands.
PPG, whose brands include Pittsburgh Paints, Olympic and
Glidden, said earlier this month that it continued to believe in
the strategic rationale for the deal despite the initial rejection.
It didn't immediately issue a response to the rejection of its
second proposal.
Write to Ian Walker at ian.walker@wsj.com and Christopher Alessi
at christopher.alessi@wsj.com
(END) Dow Jones Newswires
March 22, 2017 05:20 ET (09:20 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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