Tuesday 24 September 2019

AkzoNobel prepares to ward off PPG bid, shores up defences

Photo: Akzo Nobel

The beleaguered paints, coats and chemicals concern AkzoNobel is building up its defenses in the Netherlands against a hostile bid from its US-based sector rival PPG, the Financieele Dagblad said on Monday.

The Dutch company is seeking help to shore up its defenses against the bid through contacts with politicians, unions and its own shareholders. AkzoNobel hopes nationalistic sympathies will help its cause as elections loom, the paper said.

‘We are trying to make AkzoNobel as unattractive as possible to PPG,’ a company source told the paper. ‘It’s strange that PPG should bring out a bid just as the Dutch and other European voters go to the polls,’ he said. The company is sending out tweets with the hashtag #DutchPride to this effect.

PPG bid €20.9bn for AkzoNobel, two-thirds in cash and one-third in PPG shares on  March 2 and reliable sources say the American company is preparing a sweetened bid.

AkzoNobel is also counting on objections to the takeover from the EU competition authority because PPG and AkzoNobel hold the number one or two positions in many European markets including the Netherlands, France, Germany and Britain.

AkzoNobel has a relatively weak position because of its low stock market valuation. The company plans to hive off its chemicals division to concentrate on paints and coatings.

Unions called in

AkzoNobel has called in the unions for their advice. Erik de Vries, a negotiator for the FNV trade union, said a takeover would benefit only the shareholders and is not in the interest of employees.’

Arthur Bot of the CNV union is ‘pleased that AkzoNobel is taking a firm position with PPG. Our experience with American firms is that workers’ rights diminish. This has certainly been the case with other US takeovers of Dutch companies.

‘Our advice to PPG is that they should think over the move. With both management and their workers against a takeover, it’s not going to be a party.’

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