AkzoNobel rejects third PPG takeover bid; focus own strategy

AkzoNobel rejects third PPG takeover bid; focus on own strategy

11:09 AM, 8th May 2017
AkzoNobel rejects third PPG takeover bid; focus on own strategy

AMSTERDAM, NETHERLANDS: AkzoNobel NV has rejected a third unsolicited, non-binding and conditional takeover bid by PPG Industries Inc, valued at $29.51 billion.

The company said that the revised proposal undervalues the company, carried competition risks and did not address cultural differences. It also insisted that its own strategy would create greater value for its shareholders.

AkzoNobel analysed PPG’s proposal on the following areas:


The bid fails to provide appropriate value to AkzoNobel shareholders and does not reflect AkzoNobel’s current and future value – undervaluing the company.

Does not include an appropriate change of control premium, reflecting AkzoNobel’s strategy, including the recently announced plans to separate speciality chemicals and paints and coatings

Risks potential leakage of value through loss of customers, key employees and partners.


AkzoNobel’s strategy contains a clear outline to value creation- create two focused businesses within 12 months and increased financial guidance for 2020.

PPG’s proposal, by contrast, contains no such commitments on timing other than generic statements.

Faces complex and lengthy regulatory hurdles which could take up to 18 months to complete

Would require significant time to implement while containing inherent risks of completion

Provides limited visibility in relation to the closing of the transaction and subsequent integration of the two businesses

Would require substantial and complex structural changes and be vulnerable to regulatory-led delays


Requires significant and value-eroding disposals in order to achieve anti-trust approval

Would result in disruption to business momentum and dislocation as a result of forced divestitures of integrated manufacturing facilities and supply chains

Would be subject to significant integration risk

Conflicts with PPG’s stated strategy of exiting the speciality chemicals market

Stakeholder considerations

Creates significant risks and uncertainties for thousands of jobs worldwide

Does not recognise or substantiate any commitments to bridge the significant cultural differences between both companies

Fails to sufficiently address significant stakeholder concerns, uncertainties and risks

Lacks meaningful commitments or solutions customary in major transactions

By contrast, PPG lags in the area of sustainability:

AkzoNobel has maintained a top 10 position in the Dow Jones Sustainability Index for the last 11 years

AkzoNobel is ranked considerably higher than PPG in recognised indices including Sustainalytics and Bloomberg ESG

In 2016 alone, AkzoNobel’s Human Cities initiative involved 300 projects impacting over 9 million people.  This compares with PPG’s Colourful Communities program which, in the total period since its launch, has impacted 1.8 million people across 60 projects.


Taking all of the above factors into consideration, including the meeting with PPG, the Boards of AkzoNobel have concluded that PPG’s proposal is not in the best interests of the company, its shareholders and all other stakeholders.

“The PPG proposal undervalues AkzoNobel, contains significant risks and uncertainties, makes no substantive commitments to stakeholders and demonstrates a lack of cultural understanding,” said Ton Buchner, CEO, AkzoNobel.

“By contrast, AkzoNobel has outlined a compelling strategy to accelerate growth and value creation which we believe will deliver significant long-term value for our shareholders and all other stakeholders. We will deliver this within a clear timeline, without the substantial level of risks and uncertainties attached to the alternative proposal,” added Buchner.

“We have a strong track record of delivering on our commitments and are fully focused on accelerating growth momentum and enhanced profitability with the creation of two focused, high-performing businesses – paints and coatings and speciality chemicals – which will lead to a step change in growth and long-term value creation for shareholders and all other stakeholders,” concluded Buchner.

© Worldofchemicals News 



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