LONDON (From The New York Times) -- Akzo Nobel, the Dutch paint and chemicals company, said on Thursday that it had rejected an unsolicited takeover offer from PPG Industries that valued it at $22 billion and that would have created an industry giant in a rapidly consolidating sector.
Akzo Nobel, which makes Dulux paint, Eka bleaching solutions and Interpon powder coatings, said that the offer from PPG, based in Pittsburgh, "substantially undervalues" the company and its long-term prospects. The firm, which is based in Amsterdam, said it was studying the possibility of spinning off its specialty chemicals business.
There has been growing concern in the Netherlands over foreign entities seeking to buy some of the country's largest companies. General elections will be held next week, and politicians have expressed worries about the vulnerability of Dutch companies to foreign takeovers.
Kraft Heinz, another American conglomerate, made -- and then quickly withdrew -- a $143 billion offer last month for Unilever, the British-Dutch maker of Dove soap, Axe body spray, Ben & Jerry's ice cream and Hellmann's mayonnaise.
"The unsolicited proposal we received from PPG substantially undervalues our company and contains serious risks and uncertainties," Ton Buchner, the Akzo Nobel chief executive, said in a news release. "The proposal is not in the interest of Akzo Nobel's stakeholders, including its shareholders, customers and employees, and we have unanimously rejected it."
Under the terms of the offer, Akzo Nobel investors would have received 54 euros in cash and 0.3 of a PPG share for each share of Akzo Nobel they hold, equivalent to €83 a share. That valued Akzo Nobel at €20.9 billion, or about $22 billion.
The company is one of the world's largest makers of paints and coatings, employing 45,000 people in about 80 countries. It reported revenue of €14.2 billion last year.
Akzo Nobel said that its supervisory and management boards had carefully reviewed the proposal but felt it failed "to reflect the long term value creation potential of the company."
It added that it had not initiated, encouraged or held any conversations with PPG on the matter.
The Dutch company said it would now consider the spinoff of its specialty chemicals arm, which had €4.8 billion in revenue last year. It is also weighing several alternative ownership structures for the business, including establishing an independently listed entity.
The offer came four years after PPG completed a $1.05 billion deal for Akzo Nobel's North America architectural coatings business.
PPG announced in December a global restructuring program aiming to cut $125 million in annual costs.