PPG shares jump on word of it exploring deal with AkzoNobel

Shares in PPG jumped by more than 10 percent during Wednesday trading after a report that the Downtown coatings giant may be in talks to acquire all or part of Dutch paints maker AkzoNobel NV.

Bloomberg News, citing people familiar with the matter who could not be named, said PPG was working with advisers on a possible deal with Amsterdam-based AkzoNobel.

PPG shares hit a daily high of $113.49 before closing at $106.83, up $6.05. AkzoNobel’s U.S. shares climbed 12 percent.

Neither company would comment.

“As a matter of policy, PPG does not comment on market rumors or speculation,” PPG said.

A deal between PPG and AkzoNobel, both ranked among the top coatings companies in the world, would create a global paints leader. AkzoNobel is Europe’s largest coatings supplier, with a portfolio spanning basic chemicals such as chlorine all the way through to ingredients for skin cream and paint for Formula 1 racing cars.

PPG, which has 156 factories worldwide supplying paints, coatings, specialty materials and fiber glass, acquired AkzoNobel’s North American decorative paint business in 2012 for $1.05 billion. That deal added the high-profile Glidden and Liquid Nails brands to PPG’s portfolio, which already included PPG Paints and Olympic.

Several analysts on Wednesday said a PPG-Akzo deal could face heavy antitrust scrutiny, especially in northern Europe, because of overlap in markets

including architectural, industrial, aerospace and automotive refinishing coatings.

Both AkzoNobel and PPG have stayed on the sidelines of recent dealmaking in the paint and chemicals industries.

Dow Chemical agreed in 2015 to a $65 billion planned merger with DuPont, while SherwinWilliams paid $11 billion to buy rival paintmaker Valspar Corp., and Evonik Industries agreed to the $3.8 billion purchase of a coatings additives business from Air Products & Chemicals Inc.