20th June 2019

AKZONOBEL REJECTS THIRD PPG OFFER

The board of directors of AkzoNobel has firmly rejected a third merger proposal by PPG. The offer, worth roughly $29-billion, was dismissed after an assessment by the board of directors. In a public statement, AkzoNobel noted: "The extensive review and the meeting with PPG confirmed to AkzoNobel that its own strategy is better and does not contain the risks and uncertainties inherent in PPG’s proposal.”

This followed a meeting between AkzoNobel CEO Ton Büchner and supervisory board chairman Antony Burgmans, and PPG Chairman and CEO Michael McGarry who came with his company's lead independent director Hugh Grant. The meeting was held in Rotterdam, on May 6.

AkzoNobel has been reluctant about the idea of a merger since PPG's first offer some months ago. It has stated it plans to spin off its specialty chemicals business as a separate entity from its paints and coatings business.

PPG expressed disappointment over the response, and claimed that the Dutch company refused to negotiate. In its statement, it commented on being “disappointed that AkzoNobel has once again refused to enter into a negotiation regarding a combination of the two companies, ignoring the best interests of its stakeholders, including long-term shareholders who overwhelmingly support engagement."

PPG added that the AkzoNobel executives “stated up front that they did not have the intent nor the authority to negotiate.” They also reportedly refused to respond to questions on their own company's planned split.

“The failure of the AkzoNobel Boards to engage with PPG to fully evaluate and discuss PPG’s proposal reflects a continued lack of proper governance, and is another attempt to avoid a true comparison on stakeholder impacts of PPG’s proposal versus AkzoNobel’s standalone plan,” PPG stated in its press release.

The merger proposal has been supported by a shareholder group led by the hedge fund Elliott Advisers, which moved to have AkzoNobel chairman Antony Burgmans removed at a meeting in April. AkzoNobel, in response, questioned the closeness of the relationship between Elliott and PPG.

www.akzonobel.com