AkzoNobel announces sale of chemical arm for 10.1B
LEADING global paintmaker AkzoNobel announced on Tuesday it was selling its chemicals arm to US-based investors Carlyle Group and Singapore’s GIC for € 10.1 billion ($12.6 billion), seeking to restore investor confidence in the Dutch giant.
“AkzoNobel today announces the sale of 100 percent of its speciality chemicals business to The Carlyle Group and GIC for an enterprise value of 10.1 billion euros . . . as part of its strategy announced in April 2017,” it said in a statement.
The deal is expected to be complete by the end of 2018, and the Dutch company said it considered the move “in the best interests of AkzoNobel, Speciality Chemicals and its respective stakeholders, including employees, shareholders and customers”.
Net proceeds after deductions will total € 7.5 billion – “the vast majority . . . to be distributed to shareholders”.
“Today is a key milestone in creating two focused, highperforming businesses to generate value for all stakeholders,” added AkzoNobel’s Chief Executive Thierry Vanlancker.
Shareholders seemed to approve and AkzoNobel’s share price jumped by 3.5 percent in early afternoon trade on the Amsterdam stock exchange’s AEX index.
The manufacturer of such household paint brands as Dulux and Trimetal, AkzoNobel said last year it was splitting off its chemicals arm as it fended off an increasingly hostile takeover bid by US-based rival PPG. After making three offers, PPG eventually dropped its efforts in mid2017, which would have valued the Dutch firm at € 26.9 billion.
The hostile move was backed by furious shareholders including US activist investor group Elliott Advisors, which finally agreed to bury the hatchet in August after losing a court case.
In November, AkzoNobel announced merger talks with another US firm, Axalta, had been ditched, after the two failed to reach an agreement.
Dutch media reported that AkzoNobel considered three offers or even an initial public offering, but eventually settled on a private sale to the Carlyle Group and its longstanding investment partner GIC.
Carlyle and GIC edged out rival bids by agreeing to keep the business intact and giving assurances on workers’ salaries and benefits, Bloomberg news agency said.
Vanlancker said he was confident the deal would be approved by regulatory authorities as it was “not a complicated process”. Approval would take around four to five months, he added.