Akzo Faces Tough Battle after Fending off PPG

After vanquishing the enemy, Akzo Nobel now faces more battles on other fronts.

The Dutch paintmaker’s resistance to a three-month takeover assault finally succeeded last week, when its US rival PPG Industries gave up its pursuit of a €26.9bn deal that would have created an industry leader. But Akzo’s victory may yet be pyrrhic. Chief executive Ton Büchner faces the considerable tasks of splitting the company into two and achieving increased financial targets that were promised as part of the defence.

At the same time, he must repair strained relationships with a number of investors who were angered by the Amsterdam-based group’s handling of the episode.

“[Mr Büchner] has a lot of bridges to rebuild,” says one top five shareholder in Akzo. “We also want tangible answers on how they plan to achieve their standalone plan.”

The immediate task at hand is to win back the support of several large shareholders, who publicly criticised Akzo over its refusal to enter negotiations with its suitor.Egged on by the activist hedge fund Elliott Advisors, notorious for aggressive campaigns to influence corporate boardrooms, they included a number of blue-chip institutional investors not known for sticking their head above the parapet.