AkzoNobel competes with rival PPG acquire Tikkurila €31.25/share

AkzoNobel competes with rival PPG to acquire Tikkurila for €31.25/share

9:38 AM, 18th January 2021
Tikkurila office in Finland. (Representative Image/File Photo)

AMSTERDAM, THE NETHERLANDS: AkzoNobel NV made a comprehensive non-binding proposal to acquire Tikkurila, to create a strong platform for future growth and to build a shared European heritage.

The proposal includes an all-cash public offer for all issued and outstanding shares of Tikkurila at an offer price of €31.25 per share (potential offer) and total equity value of around €1.4 billion ($1.69 billion). This represents a premium of 113 percent to Tikkurila's volume weighted average share price for the undisturbed three-month period ending 17 December 2020 and is 13 percent higher than the recent, current offer made by its rival PPG, the US-based paint maker.

"The natural combination of AkzoNobel and Tikkurila would build on centuries of industry experience and a shared European heritage to create significant value for customers, employees, shareholders and other stakeholders. Bringing together our premium brands and leading portfolios would provide customers with a wider range of innovative products and services, including the most sustainable paints and coatings solutions,” said Thierry Vanlancker, AkzoNobel CEO.

To obtain merger clearance and ensure deal certainty for Tikkurila and its shareholders, AkzoNobel has agreed with Hempel key terms for the sale of assets, including the decorative paints business of AkzoNobel in the Nordics and the Baltics, to be completed after closing of AkzoNobel's proposed public offer for Tikkurila.

The Nordic culture and strong presence of Tikkurila in Finland would be reflected in the future organization. The main offices and production facilities of Tikkurila in Finland would become the vital hub for the combined business in the Baltic Sea region and substantial investment would be made in production facilities to supply future growth.

"Our complementary geographic profiles would create superior value compared to any other combination, including growth opportunities for the company and its employees. Our collective procurement capabilities, expanded production, and combined sales and distribution channels would deliver substantial value creation,” said Vanlancker.

The transaction is expected to be EPS accretive in 2022, is aligned with the capital allocation priorities of AkzoNobel, and will be financed using existing cash and credit lines. AkzoNobel will continue its current €300 million share buyback program and maintains a target leverage ratio of 1-2x net debt/EBITDA.

AkzoNobel invites the Board of Directors of Tikkurila to enter into negotiations with a view to reaching agreement on a recommended voluntary public cash tender offer.

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