AkzoNobel confirms restructure plans after PPG walks away
Published: Friday, 07 July 2017
AkzoNobel promises to re-engage with shareholders after its board of directors successfully rebuffs a string of takeover bids from US paint group PPG.
Dutch paint firm AkzoNobel reaffirmed plans to increase
dividends and spin out its chemical arms, pledging to re-engage
with shareholders after US paint group PPG walked away from a
The board of Akzo, which owns the paint brand Dulux, has
rejected a string of informal offers from PPG, despite vocal
support for the proposed deal from some investors and
PPG boss Michael McGarry said on 1 June the firm had received
no response from Akzo following its latest bid.
"As a result, we believe it is in the best interests of PPG and
its shareholders to withdraw our proposal to AkzoNobel," he
Dutch stock market rules mean that PPG now cannot make another
offer for Akzo for the next six months.
PPG’s latest bid for Akzo, made in late April,
valued the European paint company at €26.9bn
Akzo rejected this offer as it had two previous versions,
saying it undervalued the company and accusing PPG of a "lack
of cultural understanding of the brand".
In the wake of PPG’s withdrawal, Akzo pledged
instead to push on with its own plans to reward
In April, Akzo put forward an alternative plan to the merger,
promising to give shareholders €1.6bn.
It also said it would spin off its chemicals subsidiary, which
represents a third of sales and profits.
Prospects for the deal were dealt a blow last week by a legal
defeat for pro-takeover investors.
A Dutch court ruled that Akzo did not have to hold an
extraordinary shareholder meeting, as had been requested by a
group of investors including Elliot Management.
On 2 June, Akzo pledged to "intensify dialogue" with the rebel
The company pleged a "programme to actively solicit the views
of shareholders, including those who have recently challenged
the company", promising "further insight into its strategy and
decisions in respect of PPG’s proposals".