AkzoNobel Turns Down Third PPG Takeover Offer, to Focus on New Strategy

Dutch chemicals company AkzoNobel NV has turned down a third and final takeover offer by the U.S. specialty company PPG Industries Inc., worth over 24.6 billion euros ($26.9 billion).

In a May 8 statement, the Amsterdam-based company said the decision followed an “extensive review and careful consideration of” the PPG offer, which was made on April 24.

Instead, the company said it would focus on its own new strategy which it presented April 19 and involves the separation of its Specialty Chemicals unit into a new business unit and its divestment within 12 months.

The PPG proposal, said the Dutch company, “fails to provide appropriate value to AkzoNobel shareholders and does not reflect AkzoNobel's current and future value.”

"The PPG proposal undervalues AkzoNobel, contains significant risks and uncertainties, makes no substantive commitments to stakeholders and demonstrates a lack of cultural understanding," said AkzoNobel CEO Ton Buchner.

AkzoNobel said that it had concluded that the interests of shareholders and other stakeholders were best-served by its own strategy to accelerate growth and value creation.

This, according AkzoNobel, was because the company believed its own strategy “is better and does not contain the risks and uncertainties inherent in PPG's proposal.”

The proposed strategy announced April 19 pledges to give 1 billion euros ($1.09 billion) in a special dividend to shareholders in November, “reflecting confidence in the planned separation,” the company added.

Under the new structure, the company will either list the Specialty Chemicals unit as a separate entity or sell it and focus on Paints & Coatings business with “fit-for-purpose” structure and processes”.

The specialty chemicals unit, which had sales of 4.8 billion euros ($5.2 billion) in 2016 makes ingredients for products including plastics, detergents and pharmaceuticals.