PPG scrubs attempt to buy AkzoNobel
Print Edition
US paints and coatings maker PPG Industries has dropped its attempt to buy Dutch rival AkzoNobel in a 26.3-billion-euro (US$29.5 billion) deal, stung by repeated rejections from the company, legal defeats and hostility from Dutch politicians.
Although it has retained its independence, Akzo must make good on promises it made to appease shareholders unhappy after it refused to enter talks with Pittsburgh-based PPG.
Once PPG’s interest became known in March, Akzo set higher performance targets, promised 1.6 billion euros in extra dividends and unveiled plans to sell or float a chemicals subsidiary, which represents a third of company sales and profits.
PPG called off its pursuit yesterday after almost three months. “We believe it is in the best interests of PPG and its shareholders to withdraw our proposal to AkzoNobel at this time,” PPG CEO Michael McGarry said in a statement.
PPG may not approach Akzo again during a six-month cooling-off period.
In arguing against a PPG takeover, Akzo said it would be bad for employees, that the companies’ cultures did not mesh, and that a deal would face antitrust risks.
The timing did not help PPG, coming a week before national elections on March 15. With concerns over the impact on Dutch jobs, Economic Affairs Minister Henk Kamp branded a takeover as “not in the national interest.”
Akzo CEO Ton Buechner said yesterday that he believes the company’s new strategy will lead to a “step change in growth and long-term value creation for our shareholders and all other stakeholders.”
He said the company was committed to “an open and constructive dialog with our shareholders and all other stakeholders.”
That follows a court ruling on Monday in which a judge ordered the company to communicate better with its shareholders, without specifying how.
A group of institutional shareholders representing about 18 percent of the company’s investor base lost a bid at the Amsterdam Enterprise Chamber on Monday to force Akzo’s boards to engage in talks with PPG.
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