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Akzo Nobel, the Dutch company that makes everything from paint to table salt, has held talks with US rival PPG Industries over a potential combination that could create a $42bn global chemicals giant, people briefed about the talks said.

The Netherlands-based company, whose products range from protective coatings for iPhones to industrial paints, and PPG have been working with advisers to carry out what would be one of the largest cross-border transactions of the year.

People close to the two companies warned that it was far from assured that an agreement would be reached. News of the talks emerged at a politically sensitive time in the Netherlands, where nationalist sentiments are on the rise ahead of next month’s general election.

Jeroen Dijsselbloem, the Dutch finance minister, said on Tuesday that the government should be given greater powers to block foreign takeovers of domestic companies that were deemed to be against the national interest.

The comments made by the usually open minded Labour politician, comes as mainstream parties in the Netherlands are coming under pressure from the surge in popularity of Geert Wilders’ far-right Party for Freedom (PVV), which is riding the anti-immigrant and populist wave that has swept Europe in the past years.

It was unclear whether the talks held between the two groups were on friendly terms or whether PPG is trying to do a hostile takeover.

Akzo Nobel’s US shares rose 12 per cent, giving it a market value of about $17bn, after Bloomberg first reported that PPG was exploring a potential deal. Meanwhile, the stock price of the Pittsburgh, Pennsylvania-based company went up 10 per cent.

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