Akzo Nobel Rejects $22 Billion Offer From PPG -- 2nd Update
March 09 2017 - 03:27AM
Dow Jones News
By Ian Walker
Dutch paints and chemicals maker Akzo Nobel NV said Thursday it
has rejected an unsolicited EUR20.9 billion ($22.1 billion) offer
from U.S. peer PPG Industries Inc., the latest sign of
consolidation in the industry.
Amsterdam-based Akzo said PPG made an offer of EUR54 in cash and
0.3 PPG shares for each Akzo share, corresponding to a value of
EUR83 a share.
Akzo, which counts Dulux, Sikkens, Interpon and Eka among its
brands, said PPG's proposal substantially undervalues the company
and isn't in the interest of its shareholders.
The offer comes amid a period of consolidation in the chemicals
industry. U.S. giants Dow Chemical Co. and DuPont Co. are in the
process of finalizing a $120 billion merger, and have offered to
sell businesses to gain approval from the European Union's
antitrust regulator.
The proposal isn't the first time PPG has courted Akzo. In 2012,
the Pittsburgh-based company bought Akzo's North American
house-paint business for $1.05 billion.
Akzo, which employs 45,000 people in around 80 countries, said
Thursday that its board has carefully reviewed and considered PPG's
proposal and unanimously concluded that it doesn't reflect the
long-term potential of the company. It added that it would create
potential uncertainty for thousands of jobs world-wide.
Akzo said it now plans to review options for the separation of
its specialty-chemicals business, which generated revenue in 2016
of EUR4.8 billion. It said it would consider various alternative
ownership structures for the unit, including a new independent
listed entity.
PPG in December launched a restructuring program in an effort to
save $120 million to $130 million a year because of a slowdown in
global demand and weaker-than-expected growth in Europe.
Akzo became one of the world's largest paints makers after it
acquired U.K. rival Imperial Chemical Industries Ltd. in 2008 for
GBP8 billion ($12.9 billion).
The Dutch company struggled to digest the debt-financed
acquisition, which raised its exposure to Europe's troubled
automotive and construction industries, culminating in a series of
profit warnings in 2011. It has since slashed costs and laid off
staff.
At close of business Wednesday, Akzo had a market capitalization
of $17.12 billion, while PPG's was $27.47 billion.
Write to Ian Walker at ian.walker@wsj.com
(END) Dow Jones Newswires
March 09, 2017 03:12 ET (08:12 GMT)
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