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Home  > Markets & companies  > Coatings market  > PPG CEO‘s issues open letter to Akzo Nobel...

Monday, 14 October 2019
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Markets & companies, Coatings market

PPG CEO‘s issues open letter to Akzo Nobel shareholder and a third offer

Monday, 24 April 2017

The struggle between Akzo Nobel and PPG enters another round. PPG submitted a third offer to buy Akzo Nobel worth almost EUR 27 billion. Simultaneously PPG complaines about indiscretions.

PPG Chairman and Chief Executive Officer Michael McGarry. Source: PPG Industries

PPG Chairman and Chief Executive Officer Michael McGarry. Source: PPG Industries

PPG today announced that it submitted a revised proposal on April 24, 2017, for a takeover of Akzo Nobel. The comprehensive proposal letter, which was provided to Messrs. Antony Burgmans, Chairman of the Supervisory Board and Ton Büchner, Chief Executive Officer and Chairman of the Board of Management, detailed PPG’s increased price of EUR 96.75 (cum dividend) per outstanding ordinary share of AkzoNobel, comprised of cash of EUR 61.50 and 0.357 shares of PPG common stock. Including the assumption of net debt and minority interests, the proposed transaction is now valued at approximately EUR 26.9 billion.

In the letter, PPG Chairman and Chief Executive Officer Michael McGarry said, "We are extending this one last invitation to you and the Akzo Nobel boards to reconsider your stance and to engage with us on creating extraordinary value and benefits for all of Akzo Nobel’s stakeholders. Our revised proposal represents a second increase in price along with significant and highly-specific commitments that we are confident Akzo Nobel’s stakeholders will find compelling. We stand ready to work with you expeditiously to complete a targeted due diligence review and to negotiate a definitive agreement for the combination.”

PPG pitches shareholders on Akzo Nobel deal in open letter

Last week Michael McGarry wrote in the letter that PPG was willing to make commitments "with clear solutions to the stakeholders concerns" if the two companies were able to "sit down constructively together." McGarry reminded shareholders that PPG had bought an Akzo Nobel business unit and agreed to 18 specific conditions, which he said PPG met or exceeded. The letter also disclosed that PPG had first approached Akzo Nobel about a potential merger in 2013 but had been rebuffed then but it was revived in a "private, formal proposal" during a lunch with CEO Ton Büchner in March 2017.

"I made clear our desire to maintain the confidentiality of the proposal and to negotiate privately to reach an agreed-upon transaction," McGarry wrote. "Unfortunately, the following week, in response to market rumors Akzo Nobel announced publicly not only that it had received our proposal but also that it had rejected that proposal without ever seeking to discuss and engage with us."

Related news:

Akzo Nobel unveils new strategy to split up

PPG offer rejected: will Akzo Nobel stick with its "No”?

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