AkzoNobel confirms focus on its own strategy to accelerate growth and value creation

AkzoNobel has concluded its own strategy, presented on April 19, 2017, offers a superior route to growth and long-term value creation and is in the best interests of shareholders and all other stakeholders.

This decision follows considerable in-depth analysis of PPG’s proposal by the Supervisory Board and Management Board of AkzoNobel, working closely with their financial and legal advisors. As part of this process, on May 6, 2017, Ton Büchner, CEO, and Antony Burgmans, Chairman of the Supervisory Board of AkzoNobel, met with Michael McGarry, Chairman and CEO, and Hugh Grant, Lead Independent Director of PPG.

In the execution of their fiduciary duties, the absolute focus of the Boards has been to determine whether the proposal by PPG fits with AkzoNobel’s strategic objectives, is in the best interests of the company and creates long-term value for shareholders and all other stakeholders.

After extensive consideration, the company has concluded that the interests of shareholders and other stakeholders are best-served by its own strategy to accelerate growth and value creation. That strategy set out a clear road map for:

» The creation of two focused and high-performing Paints and Coatings and Specialty Chemicals businesses, to enable an acceleration of growth and enhanced profitability;

» Significantly increased financial guidance for Paints and Coatings and Specialty Chemicals;

» The clear separation of Specialty Chemicals within 12 months with the vast majority of net proceeds to be returned to shareholders;

» Increased shareholder returns, including a 50% higher dividend for 2017 and €1 billion special cash dividend payable in November;

» The creation of significant value for shareholders in the short, medium and long term, whilst also securing the interest of other stakeholders.

The extensive review and the meeting with PPG confirmed to AkzoNobel that its own strategy is better and does not contain the risks and uncertainties inherent in PPG’s proposal. This strategy will build on the existing growth momentum within AkzoNobel and create a step change in value creation for shareholders and all other stakeholders.

PPG’s proposal has been tested on four key areas: value, certainty, timing, and stakeholder considerations.

Conclusion

The Boards of AkzoNobel have concluded that PPG’s proposal is not in the best interests of the company, its shareholders and all other stakeholders.

Ton Buchner, AkzoNobel CEO, said: “As part of our fiduciary duties we conducted an extensive review of the third proposal from PPG. This process included myself and Antony Burgmans meeting with the CEO and lead independent director of PPG to understand their proposal in more detail. The PPG proposal undervalues AkzoNobel, contains significant risks and uncertainties, makes no substantive commitments to stakeholders and demonstrates a lack of cultural understanding. By contrast, AkzoNobel has outlined a compelling strategy to accelerate growth and value creation which we believe will deliver significant long-term value for our shareholders and all other stakeholders. We will deliver this within a clear timeline, without the substantial level of risks and uncertainties attached to the alternative proposal. We have a strong track record of delivering on our commitments and are fully focused on accelerating growth momentum and enhanced profitability with the creation of two focused, high-performing businesses – Paints and Coatings and Specialty Chemicals – which will lead to a step change in growth and long-term value creation for shareholders and all other stakeholders.”