Pittsburgh Post-Gazette

PPG pushes Akzo to negotiate deal

- By Joyce Gannon

Pittsburgh Post-Gazette

PPG again urged coatings rival AkzoNobel to sit down and hammer out a deal to be acquired, saying it can inject more value into the Dutch company than Akzo’s own strategic plan will do.

In an open letter to Akzo’s stakeholde­rs on Monday, Michael McGarry, PPG’s chairman and chief executive, said Akzo’s plan to unlock value by spinning out its chemicals business “will be more risky, create more uncertaint­y for AkzoNobel employees, leave AkzoNobel with stranded costs from the divestitur­e, and create less value than our proposal.”

PPG last month made two offers to buy Amsterdamb­ased Akzo with the latest bid valued at $26 billion, or 90 euros per share including a dividend.

Despite mounting pressure from its shareholde­rs to negotiate with PPG, Akzo rejected the bids saying they undervalue­d the company and put jobs at risk.

Akzo, which makes Dulux and other paint brands, is scheduled to unveil its own plan Wednesday.

PPG, maker of Olympic, Glidden and Pittsburgh Paints, has not ruled out pursuing a hostile takeover of Akzo.

In his letter, Mr. McGarry noted that when PPG bought Akzo’s North American decorative paints unit several years ago, it followed through on all of its commitment­s “because we had access to appropriat­e levels of due diligence.”

If it succeeds in buying all of Akzo, “PPG is prepared to make similar commitment­s with clear solutions to the stakeholde­rs’ concerns,” Mr. McGarry said. “This is only possible, though, when PPG and AkzoNobel sit down constructi­vely together.”

PPG’s shares rose Monday to $105.39, up 97 cents. Financial markets in The Netherland­s were closed Monday for the Easter holiday.

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