AkzoNobel rejects PPG offer for speciality chemicals; mulls IPO

Speciality chemicals firm AkzoNobel says it is reviewing strategic options for the separation of its Specialty Chemicals business, after having rejected an unsolicited, non-binding and conditional proposal from PPG Industries Inc. for all of the issued and outstanding ordinary shares in the capital of AkzoNobel.

PPG’s proposal was said to substantially undervalue AkzoNobel and is not in the interest of its stakeholders, including its shareholders, customers and employees, the company said.

AkzoNobel confirms it received the proposal from PPG for a public offer on all of the issued and outstanding ordinary shares in the capital of AkzoNobel at a price of EUR54 in cash and 0.3 PPG shares per AkzoNobel share, corresponding to a value of EUR83 per share as per 28 February, 2017 (cum final dividend 2016).

AkzoNobel says it did not initiate nor has it encouraged or entertained any conversations with PPG on this matter.

The Specialty Chemicals business, which had revenues of EUR4.8 billion in 2016, is strongly positioned with a broad portfolio of leading technologies and chemicals which service a wide range of end-user segments including construction, industrial and consumer goods. The separation will allow the Specialty Chemicals business to continue to build and accelerate its market-leading positions across a range of market segments, says the firm.

As part of the separation, AkzoNobel says it will consider various alternative ownership structures for the Specialty Chemicals business including, but not limited to, the establishment of an independent listed entity. “The ultimate structure will be determined by reference to shareholder value maximisation as well as broader stakeholder considerations,” it said.

Ton Büchner, CEO, AkzoNobel: “We are reviewing strategic options to separate it from the company to create focus for both Specialty Chemicals and the Decorative Paints and Performance Coatings group, allowing them to build further on their respective leadership positions.”

As stated in its full-year results announcement in February, AkzoNobel is now a leaner company with a solid financial and operational foundation and a focus on growth.

AkzoNobel says it has enjoyed a record performance in recent years in terms of profitability and has made significant strategic progress.