Cleveland, Ohio – Paint supplier AkzoNobel has rejected a $22 billion takeover bid from rival PPG. Though primarily an industrial coatings company, AkzoNobel is involved in powder coating and wet coating for the automotive and commercial truck industries, markets that PPG dominated in North America.
PPG Chairman and CEO Michael McGarry said, “PPG has long admired AkzoNobel’s businesses, global presence, culture, and principles as well as its advances in innovative product development and sustainable business practices. We believe a combination of our two companies is a very compelling strategic opportunity. We are confident that this combination is in the best interests of the stakeholders of both companies as it presents a unique opportunity to build on the successful legacies of our businesses. PPG has carefully considered the interest of all AkzoNobel stakeholders including shareholders, employees, customers, and the communities it serves and has proposed its willingness to enter into serious commitments in respect of all stakeholders.”
AkzoNobel officials responded to the bid by rejecting it, yet saying they would sell their specialty chemicals division to raise funds and focus on core markets.
AkzoNobel CEO Ton Büchner said, “The unsolicited proposal we received from PPG substantially undervalues our company and contains serious risks and uncertainties. The proposal is not in the interest of AkzoNobel’s stakeholders, including its shareholders, customers, and employees, and we have unanimously rejected it. Along with my colleagues on our Boards, our executive team, and our thousands of employees, I firmly believe that AkzoNobel is best placed to unlock the value within our company ourselves.”
AkzoNobel officials say the PPG offer was for €83 per share in cash and stock, roughly $87 per share. With more than 252 million shares outstanding, that would have put the merger value at more than $21.9 billion, one of the largest mergers in global finance.
About the author: Robert Schoenberger is the editor of Today's Motor Vehicles and a contributor to Today's Medical Developments and Aerospace Manufacturing and Design. He has written about the automotive industry for more than 17 years at The Plain Dealer in Cleveland, Ohio; The Courier-Journal in Louisville, Kentucky; and The Clarion-Ledger in Jackson, Mississippi.