AkzoNobel rejects second PPG offer

AKZONOBEL has rejected a second unsolicited takeover offer from US rival PPG Industries, worth €22.4bn (US$24.1bn).

Earlier this month, PPG offered €21bn but this was rejected on the ground that it substantially undervalued the company. AkzoNobel says the revised bid made yesterday “fails to reflect the current and future value” of the company and does not address the concerns raised following the original bid, including delivery and timing risks.

Amongst other things, the management and supervisory boards say that the increased stock component offered in the revised bid creates “significant” risks, the major geographical and segment overlap would result in many divestitures, there would be many job cuts, and that the offer does not suggest how the “culture gap” between the companies would be addressed.

The AkzoNobel boards said when they rejected the first offer that they would review options for separating off the company’s speciality chemicals business from the paints and coatings segment. The PPG offer, they say, does not recognise the potential opportunities of this option.

“We are convinced that AkzoNobel is best placed to unlock the value within our company ourselves. We are executing our plan, including the creation of two focused businesses and new cost structure, and believe this gives us a strong platform for continued profitability and long term value creation for all our stakeholders with substantially less execution risks,” said AkzoNobel CEO Ton Büchner.

PPG has not commented on the matter.