Proposal fails to recognise value of AkzoNobel and neglects to address significant risks and uncertainties, including extensive anti-trust concerns
AkzoNobel N.V. (AKZA.AS; AKZOY)
AkzoNobel today announces it has rejected a second unsolicited, non-binding and conditional proposal of 20 March from PPG Industries Inc. for all of the issued and outstanding ordinary shares in the capital of AkzoNobel.
The proposal not only fails to reflect the current and future value of AkzoNobel, it also neglects to address the significant uncertainties and risks for shareholders and other stakeholders.
The Management Board and Supervisory Board of AkzoNobel, together with their financial and legal advisors, have thoroughly reviewed the second proposal taking into consideration the interests of AkzoNobel's shareholders, customers, employees and other stakeholders.
The revised proposal represents a value of €88.72 (adjusted for final dividend) consisting of €56.22 (adjusted for final dividend) in cash and 0.331 PPG shares, as at 20 March 2017, per AkzoNobel share.
The proposal does not address the concerns expressed by the Boards in their initial rejection of 9 March 2017. The revised proposal:
Is not in the best interests of shareholders. It substantially undervalues AkzoNobel and fails to reflect the value creating opportunities of the new strategic direction and focus for both the Specialty Chemicals and the Paints and Coatings businesses, allowing them to build further on their respective leadership positions.
Contains significant risks related to the increased stock component and the high leverage of the proposed combined businesses.
Would result in a large number of substantial divestitures due to the major geographical and segment overlap of both companies across Decorative Paints and Performance Coatings, bringing into question value leakage. It does not address the significant risk and uncertainty, including timing, of deal completion due to extensive anti-trust concerns. These anti-trust issues would have a significant negative impact on employees and customers which will affect the integrity of AkzoNobel.
Will lead to significant job cuts. It includes synergies which can be expected to result in the restructuring of the combined employee base, leading to job losses. PPG provides no substantive commitments to employees, creating potential uncertainty for thousands of jobs worldwide.
Does not address fundamental stakeholder concerns and uncertainties, nor does it substantiate any tangible solutions in relation to, among others, R&D, pensions and employees.
Does not meaningfully address our concerns regarding community contribution and sustainability and the significant culture gap between both companies, including how any issues arising from this would be addressed.
The unsolicited proposal does not warrant AkzoNobel's engagement with PPG. The Boards unanimously reject PPG's revised proposal.
Ton Büchner, CEO, AkzoNobel:
"This proposal significantly fails to recognize the value of AkzoNobel. Our Boards do not believe it is in the best interest of AkzoNobel's stakeholders, including our shareholders, customers and employees. That is why we have rejected it unanimously.
"We are convinced that AkzoNobel is best placed to unlock the value within our company ourselves. We are executing our plan, including the creation of two focused businesses and new cost structure, and believe this gives us a strong platform for continued profitability and long term value creation for all our stakeholders with substantially less execution risks."
AkzoNobel will provide updated financial guidance and hold an upcoming investor event soon. Details of the event will be announced in due course.
This is a public announcement by AkzoNobel N.V. pursuant to section 17 paragraph 1 of the European Market Abuse Regulation (596/2014). This public announcement does not constitute an offer, or any solicitation of any offer, to buy or subscribe for any securities in AkzoNobel N.V.
About AkzoNobel
Dutch government recognizes AkzoNobel's contribution to national energy saving goals
March 22, 2017
The Dutch government has signed an agreement with AkzoNobel recognizing the company's latest contribution to meeting national sustainability targets resulting from investments at its chemicals complex in Rotterdam.
It is the third agreement AkzoNobel has signed under the "Energieakkoord." This is a pact between the Dutch government and over 40 public and private groups which aims to reduce energy consumption, increase the share of renewable energy and create jobs. Companies can sign bilateral agreements with the government to confirm the contribution they have made to the overall goal.
The latest agreement recognizes an investment in new "zero gap" technology which increases the efficiency of the company's chlorine plant in Rotterdam. The annual energy saving is equivalent to the electricity consumption of 26,000 Dutch households. AkzoNobel also has agreements in place that recognize energy savings at its two other chemicals sites in the Netherlands, in Hengelo and Delfzijl.
Said Dutch Minister of Economic Affairs, Henk Kamp: "To achieve a low-CO2 economy by 2050, initiatives leading to energy savings are of great importance. It's good to see how AkzoNobel is working on innovative solutions to use energy more efficiently. An initiative such as the zero-gap technology not only contributes to saving targets, but also improves the competitiveness of the companies by reducing energy costs, thus ensuring a stronger industry in the Netherlands."
The agreements at Hengelo and Delfzijl recognize the innovative use of waste heat. In Hengelo, the waste heat is supplied to the local heating system, while in Delfzijl, it is used for salt production. The three agreements are equivalent to a CO2 emissions reduction of 73,000 tons annually. This makes AkzoNobel the leading contributor to the Dutch Energy Agreement.
Knut Schwalenberg, CEO of AkzoNobel Netherlands, added. "New initiatives and partnerships are needed to make the next big step in the sustainability of the industry and economy in the Netherlands. We must seize these opportunities and constantly seek new forms of cooperation."
Schwalenburg went on to say that AkzoNobel's sustainability ambitions go beyond the Energy Agreement. "Currently, 40% of our global energy is renewable and we aim to increase this to 45% by 2020."
AkzoNobel realiseert significante energiebesparing met modernisering chemiefabriek Rotterdam
22 maart 2017
In het kader van het Energieakkoord tekent AkzoNobel vandaag een 1-op-1 afspraak met het ministerie van Economische Zaken voor de verduurzaming van haar Rotterdamse fabriek. Eerder al tekende AkzoNobel twee soortgelijke afspraken met betrekking tot energiebesparingen in Hengelo en Chemie Park Delfzijl. Het bedrijf is daarmee koploper binnen het Nederlandse Energieakkoord.
AkzoNobel gaat investeren in zogeheten 'zero gap technology' voor haar chloorbedrijf in de Botlek. Door deze technologie is het energieverbruik voor de chemische processen in de elektrolysefabriek tot 10% lager. De innovatie in de Botlek levert jaarlijks een besparing op die vergelijkbaar is met het elektriciteitsverbruik van 26.000 huishoudens; bijna genoeg om het Rotterdamse stadsdeel Kralingen-Crooswijk* te voorzien van elektriciteit.
Minister Kamp, Economische Zaken: "Om te komen tot een CO2-arme economie in 2050 zijn initiatieven die leiden tot energiebesparing van groot belang. Het is goed te zien hoe AkzoNobel werkt aan innovatieve oplossingen om efficiënter om te gaan met energie. Een initiatief zoals zero gap technology draagt niet alleen bij aan de besparingsdoelen, maar verbetert de concurrentiepositie van de bedrijven door lagere energiekosten en zorgt zo voor een sterkere industrie in Nederland."
Koploper
In het Energieakkoord zijn afspraken gemaakt over energiebesparing, schone technologie en klimaatbeleid. Dit is de derde 1-op-1 afspraak waarin AkzoNobel een energiebesparing vastlegt. Het bedrijf is daarmee koploper binnen het Energieakkoord met een potentiële jaarlijkse energiebesparing van 0,71 petajoule in 2023, gelijk aan een verlaging van CO2-emissies met 73.000 ton.
"De eerste stappen zijn gezet," zegt Knut Schwalenberg, directievoorzitter AkzoNobel Nederland en Managing Director Industrial Chemicals. "Nieuwe initiatieven en samenwerkingsverbanden zijn nodig om een volgende, grote stap te maken in de verduurzaming van de chemische industrie en economie in Nederland. We moeten deze kansen grijpen en voortdurend zoeken naar nieuwe vormen van samenwerking. De ambities van AkzoNobel gaan verder dan het Energieakkoord. Nu al is 40% van ons wereldwijde energiegebruik duurzaam en in 2020 zal dit 45% zijn."
Binnen AkzoNobel wordt voortdurend gekeken hoe het bedrijf meer kan doen met minder grondstoffen en energie. In 2016 sloot AkzoNobel een 1-op-1 afspraak voor de levering van restwarmte uit zoutproductie in Hengelo aan het lokale warmtenet. Eerder dit jaar ondertekende minister Kamp een tweede afspraak met AkzoNobel in Delfzijl, waar AkzoNobel kijkt naar slimmer gebruik van restwarmte van het chemiepark voor de zoutproductie.
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