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Dutch paints and coatings maker AkzoNobel is looking at spinning off its specialty chemicals business, after rejecting an unsolicited takeover approach by US industrial chemicals rival PPG.

The company on Thursday morning announced a “review of strategic options for the separation” of the unit, which had revenues of €4.8bn in 2016 and makes ingredients used in a wide range of products including paints, detergents, foods, plastics, cosmetics and pharmaceuticals.

The company said it is considering “various alternative ownership structures” including an independent listed entity. It comes after the FT reported that AkzoNobel and PPG had held talks on a potential combination that could have created a $42bn global chemicals giant.

PPG made an offer of €54 cash and 0.3 PPG shares per AkzoNobel share, giving a total value of €83 per share as of February 28. The bid represented a 30 per cent premium to AkzoNobel’s share price on the same date, but the company said:

PPG’s proposal substantially undervalues AkzoNobel and is not in the interest of its stakeholders, including its shareholders, customers and employees.

The company’s board unanimously rejected the rejected the offer. Ton Büchner, chief executive, told journalists on Thursday morning:

We are fully committed to say no to PPG.

Bloomberg News first reported that PPG was exploring a possible deal.
A sale of the speciality chemicals business will leave AkzoNobel with two divsions – decorative paints and performance coatings.

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