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Akzo Nobel has rejected a third takeover offer by US rival PPG Industries, leaving the door open to a hostile bid.

The Dutch company said the 26.9 billion euro offer undervalued Akzo and showed a “lack of cultural understanding of the brand”.

Akzo Nobel, which claims its own plans for growth are superior, has been urged to reject a merger by the Dutch government and its own workers.

However, some Akzo investors favor a deal.

PPG said it was disappointed by Akzo Nobel’s decision and would “review” the company’s response.

It comes several weeks after PPG increased its offer to buy Akzo Nobel for the second time as it seeks to create an industry leader in the paints and coatings sector.

Image source Wikimedia

PPG suggested the bid was its last friendly attempt to merge with Akzo and has not ruled out putting the matter directly to shareholders.

Responding on May 8, Akzo CEO Ton Buchner said his team had conducted an “extensive review” of the bid and had again found it wanting.

“The PPG proposal undervalues AkzoNobel, contains significant risks and uncertainties, makes no substantive commitments to stakeholders and demonstrates a lack of cultural understanding,” he said.

Akzo says its own plans for the company – which involve spinning off its chemicals division into a separate business – would better serve shareholders.

It has promised to increase its dividend for 2017 by half and pay a 1 billion euro special cash dividend in November.

However, Akzo also faces mounting pressure from some of its biggest shareholders to consider a deal, having repeatedly refused to enter talks with PPG’s management.

Last month, the activist investor Elliot Investors also called for a vote to oust chairman Antony Burgmans – a proposal Akzo rejected.

In its favor, Akzo has won political support against a tie-up, with four provincial governments having warned of its impact on jobs.

Akzo also says that PPG would struggle to get the deal past Dutch competition regulators, which poses a risk to shareholders.

As part of its latest offer, PPG offered commitments on jobs and to pay a break fee in case the deal was rejected by officials.

Akzo Nobel shares fell more than 2% in morning trading in Amsterdam but have jumped about 30% this year.


Dow Chemical and DuPont have announced a plan to merge, in a deal valuing them at $130 billion.

The all-share deal will eventually lead to the merged company, initially to be called DowDuPont, being split in three.

The three companies would focus on agriculture, materials and specialty products.

If the merger is cleared by regulators, the new company will be owned equally by current Dow and DuPont shareholders.

The chemical giants aim to achieve the split into three within two years of the completion of the merger.Dow DuPont merger plan 2015

They hope to save $3 billion through cost-cutting during that period.

Potential tax savings were one reason for the complicated merger-before-breakup deal, analysts said.

At the same time, DuPont announced a cost-saving plan that will involve cutting about 10% of staff.

Dow CEO Andrew Liveris will be executive chairman of the new company, while DuPont CEO Ed Breen will be the new chief executive.

“This transaction is a game-changer for our industry and reflects the culmination of a vision we have had for more than a decade to bring together these two powerful innovation and material science leaders,” Andrew Liveris said.

Shares in Dow Chemical closed down 2.8% in New York, while DuPont fell 5.5% on December 11.

Dow also said that it would assume full control of its joint venture with glassmaker Corning.