Blog Coverage PPG Revises its Proposal to Acquire Akzo Nobel

Upcoming AWS Coverage on Albemarle Post-Earnings Results

LONDON, UK / ACCESSWIRE / March 23, 2017 / Active Wall St. blog coverage looks at the headline from PPG Industries, Inc. (NYSE: PPG) as the Company announced on March 22, 2017, that it made a revised proposal on March 20, 2017, to acquire Akzo Nobel N.V. for €90 per ordinary share. This revised offer represents an increase of €7 per ordinary share from PPG’s previous offer. The payment is structured in the form of €57.50 in cash and 0.331 shares of PPG’s common stock. Including the assumption of net debt and minority interests, the proposed transaction is valued at approximately $23.6 billion. Register with us now for your free membership and blog access at:

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One of PPG Industries’ competitors within the Specialty Chemicals space, Albemarle Corp. (NYSE: ALB), reported on February 27, 2017, its fourth quarter 2016 financial results. AWS will be initiating a research report on Albemarle in the coming days.

Today, AWS is promoting its blog coverage on PPG; touching on ALB. Get all of our free blog coverage and more by clicking on the link below:

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Strategic Output of the Transaction

The combination of Akzo Nobel and PPG is set to create an enhanced global paints, coatings, and specialty materials Company while leveraging the specialty product portfolio, technologies, and geographies from each entity under the collaboration. This agreement will help create a strong competitor in the highly competitive global marketplace while serving a diverse customer base. PPG’s flagship, which includes electrocoating, compact process, waterborne and light-weighting technologies, is complementary to Akzo Nobel’s advances in sustainable formulations and practices and its global Dulux, Sikkens, and International Paint brands. Additionally, both the Companies would generate significant cross-selling opportunities for each other along with a diversified combined sales force hence driving organic sales growth.

The Two Companies

PPG currently employs more than 45,000 employees worldwide where it operates over 150 plants globally, including 45 plants across 15 countries in Europe. Both PPG and Akzo Nobel have annual sales of about $15 billion (FY16) and they have collaborated before this proposed acquisition. On December 24, 2012, PPG acquired Akzo Nobel’s North American decorative coatings business for about $1.05 billion. In 2011, the North American Decorative Paints business had revenues of $1.5 billion, around 7% of AkzoNobel’s total 2011 revenue and a 5,000 employee-strong workforce across eight manufacturing plants, and 600 Akzo Nobel-owned paint stores.

The Chemical Business Players

Both the Companies are leading paint makers. They also operate chemical businesses where they pared back their chemical operations when PPG sold its chlor-alkali operations in 2012 while merging the Chemical unit with Georgia Gulf. Akzo Nobel, on the other hand, sold its catalyst business in 2004. Currently, Akzo Nobel continues to be the major player in chemicals with specialty chemical business, amounting into $5.1 billion sales for FY16. The Company is considered an expert and market leader in markets such as pulp processing, surfactants, polymer chemistry, and chlor-alkali.

The Rejected Proposal

PPG announced on March 09, 2017, that it privately proposed on March 02, 2017, to acquire Akzo Nobel in a deal valuing the Company at about $22 billion. Akzo Nobel rejected the proposal citing that it was not in the interest of its shareholders. Akzo Nobel’s stocks surged 15% post the disclosures indicating investors are viewing a higher offer from PPG. Later, when the proposal was revised, Akzo Nobel still refused the terms and rejected PPG’s significantly revised proposal one day after it was delivered.

Terms of the Proposal

The revised proposal from PPG represents:

1. A value of the total outstanding equity of Akzo Nobel at approximately €22.7 billion.

2. A premium of 40% over the unaffected closing price of Akzo Nobel of €64.42 on March 08, 2017.

3. A premium of 39% over the 52-week high unaffected closing price of Akzo Nobel of €64.81 on March 02, 2017.

4. A premium of 45% over the volume weighted average price per Akzo Nobel share of €62.07 over the three-month period ending March 08, 2017.

5. A premium of 32% over the unaffected 12-month median broker target price per Akzo Nobel share of €68.00.

PPG has submitted a proposal to the Boards of Akzo Nobel to combine their respective businesses by way of a public offer for all issued and outstanding shares of Akzo Nobel. No agreement, however, has been reached as of now, and there are no assurances that any transaction will result from this proposal.

Stock Performance

At the closing bell, on Wednesday, March 22, 2017, PPG Industries’ stock slightly fell 0.22%, ending the trading session at $104.25. A total volume of 2.04 million shares were traded at the end of the day, which was higher than the 3-month average volume of 1.84 million shares. In the last month and previous three months, shares of the Company have advanced 1.21% and 8.77%, respectively. Moreover, the stock surged 10.45% since the start of the year. The Company’s shares are trading at a PE ratio of 49.43 and have a dividend yield of 1.53%. At Wednesday’s closing price, the stock’s net capitalization stands at $26.76 billion.

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