AkzoNobel plans to spin off Specialty Chemicals unit

20 April, 2017, 06:33 | Author: Eloise Marshall
  • AkzoNobel plans to spin off Specialty Chemicals unit

Akzo, which owns the Dulux paint brand, had earlier fleshed out its alternative plan to separate its chemicals business and pay shareholders 1.6 billion euros ($1.7 billion) in extra dividends this year rather than accept a 24.6 billion euro takeover by its US rival.

Troubled AkzoNobel's offer to hand back cash worth nearly £1.3bn failed to appease leading investors as the paints giant continues to face pressure to engage in takeover talks with American rival PPG Industries. But it has been criticised by a series of leading shareholders who have called on Akzo to open discussions with the United States business.

Elliott, which has a 3.25 percent stake in Akzo and has been critical of the company management, kept up the pressure.

Akzo, which employs around 3300 people in the United Kingdom, argued that the hostile bid contains "serious risks and uncertainties" for staff.

However, PPG countered by saying that its proposal would provide shareholders with an immediate cash payout that far exceeds Akzo's proposal. Indeed the company has been invited to attend a Extraordinary General Meeting, an invitation to which Akzo Nobel has 14 days to respond. Valued at £6.7 billion, it accounts for about a third of sales and profits.

PPG Industries, the United States firm attempting an unsolicited and unwelcome takeover of the Dulux maker, has today published an open letter to Akzo's "stakeholders" telling them: "We will be stronger together".

Akzo Nobel NV has outlined a new strategy which will see its Specialty Chemicals unit separated into a new business unit and divested within 12 months. AkzoNobel stated in a press release: "It will generate superior, faster and more certain value creation than the alternatives and with substantially fewer risks, uncertainties and social costs".

Elliott, which owns just over 3 per cent of Akzo Nobel, last week revealed it had won the support of five other shareholders to call an EGM to oust Akzo chairman Antony Burgmans.

PPG's latest offer was 90 euros per share, or about $26 billion.

Buechner's strategy that also includes new financial targets will be a tough sell in his battle against Pittsburgh-based PPG.

The Amsterdam-based group also reported net profit of 240 million euros ($257 million) in the period from January to March, relatively stable from a year earlier, but ahead of analysts' expectations.


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