PPG withdraws offer for AkzoNobel

PPG Industries has withdrawn its offer for AkzoNobel after the Dulux owner rejected three bids from the US chemicals manufacturer.

Akzo rejected PPG's third offer of €96.75 per share on 8 May, saying it undervalued the company.

PPG chairman and chief executive Michael McGarry said on Thursday: "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.

"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."

McGarry said AkzoNobel’s boards did not respond to PPG's 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."

Activist investor Elliott Advisors, which owns a 3% stake in Akzo, had repeatedly called for the Dutch company to engage in talks with PPG. It even commissioned independent research which showed that over four times the number of Akzo employees could be made redundant by a standalone company after Akzo expressed concerns that a tie-up would lead to job losses.

Back when it announced its rejection of PPG's third bid in May, Akzo said it had concluded that the interests of shareholders and other stakeholders would be best-served by its own strategy to accelerate growth and value creation.

Chief executive officer Ton Buchner said at the time: "The PPG proposal undervalues AkzoNobel, contains significant risks and uncertainties, makes no substantive commitments to stakeholders and demonstrates a lack of cultural understanding.

"By contrast, AkzoNobel has outlined a compelling strategy to accelerate growth and value creation which we believe will deliver significant long-term value for our shareholders and all other stakeholders. We will deliver this within a clear timeline, without the substantial level of risks and uncertainties attached to the alternative proposal."

At 1055 BST, Akzo shares were down 1.3% to €73.58.