Akzonobel to sell specialty chemicals unit

AKZONOBEL has today announced plans to sell off its chemicals business within a year to boost growth and reward its shareholders.

The decision from the Dutch paint manufacturer follows last month’s rejection of a second unsolicited takeover offer from US rival PPG Industries, worth €22.4bn (US$24.0bn).

AkzoNobel’s specialty chemicals unit, which makes everything from salt to bleaching agents, will be sold or listed within 12 months. It had a 2016 operating profit of €629bn, accounting for about a third of the company’s sales and profits. The remainder of the business following the split will focus on paints and coatings.

This announcement follows two offers of €21bn and €22.4bn from PPG Industries last month. Both bids were rejected on the grounds they failed to reflect the current and future value of the company, while concerns such as delivery and timing risks were not addressed.

Ton Büchner, CEO of AkzoNobel, said: “Now is the right time to create two focussed, high-performing businesses. This strategy will create substantial value for shareholders with significantly less risks and uncertainties compared to alternatives.”

Stakeholders will benefit to the tune of €1.6bn, which will be returned via a €1bn one-off special dividend in November 2017 combined with a 50% increase to the regular dividend. The company has also stated that the separation of the chemicals division will lead to €50m in annual cost savings.