PPG has withdrawn its $27.6 billion takeover pursuit of AkzoNobel and said it will not pursue a public offer for all the issued and outstanding shares of AkzoNobel.
PPG said it had made the final decision after careful consideration, including the stakeholder interests of both companies. This ends an unusually bitter trans-Atlantic standoff between two of the world’s oldest industrial companies.
“We were hopeful throughout this process that AkzoNobel’s Boards would see the merits of our compelling proposal to combine our two great companies and create significant shareholder value and a more sustainable business for the future. We strongly believe a combined company would create more opportunities and provide more benefits for our collective customers, employees, shareholders and society in general,” said Michael McGarry, PPG chairman and chief executive officer.
“We made a final attempt for engagement late last week and through a letter to AkzoNobel. In that letter, we addressed AkzoNobel’s stated commentary around value, certainty, timing and stakeholder considerations, and provided additional and specific commitments and assurances including a significant break-fee and an offer to negotiate a nominal price increase as part of an agreed transaction. However, AkzoNobel’s Boards have consistently refused to engage and did not respond to our call or letter. As a result, we believe it is in the best interests of PPG and its shareholders to withdraw our proposal to AkzoNobel at this time.”
“As always, PPG remains focused on identifying growth opportunities that will drive value and strengthen our company. We remain committed to our longstanding disciplined approach to business portfolio management and cash deployment.”
“I want to thank PPG’s many employees for their interest and support throughout this process, especially those who work within our facilities in the Netherlands. I also want to thank those stakeholders in the Netherlands who were open to and welcomed the opportunity to learn about the possibilities that a business combination could provide. We are proud to call the Netherlands home to many of our employees and businesses, and we look forward to our continued growth in this important country.”
In a response to the announcement from PPG, Ton Büchner, AkzoNobel CEO, said: “We continue to focus on our business, pursuing our strategy of accelerating sustainable growth and profitability and creating two focused, high-performing businesses – Paints and Coatings and Specialty Chemicals. We believe this will lead to a step change in growth and long-term value creation for our shareholders and all other stakeholders.
“Our talented teams around the world continue to develop, produce and deliver the most innovative and sustainable products and services for our customers, and I would like to thank all colleagues for their ongoing commitment. We reiterate our commitment to maintain an open and constructive dialog with our shareholders and all other stakeholders.”
At the end of April, PPG had submitted a third takeover offer for a combination with the Dutch paint and chemicals firm Akzo Nobel N.V. Including the assumption of net debt and minority interests, the proposed transaction is now valued at approximately €26.9 billion, or $28.8 billion.
Akzo is Europe’s largest coatings supplier and the world’s largest producer of protective and marine coatings. Its portfolio spans basic chemicals such as chlorine all the way through to ingredients for skin cream and paint. In the food ingredients industry, the company has a significant role as a salts supplier.
Source: Food Ingredients First
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