PPG chief says most top Akzo Nobel shareholders support takeover talks

Almost all of the top-20 shareholders in Akzo Nobel want the Dutch paint company to engage in €22.4bn takeover negotiations with its rival PPG Industries, the US chief executive told the Financial Times in an interview on Wednesday.

PPG’s Michael McGarry said the company had been in contact with nearly all of Akzo Nobel’s top-20 investors, who were “virtually unanimous” in their support for the “parties getting together”.

“[They were] absolutely dismayed that shareholders are being prioritised last in this conversation,” said Mr McGarry.

The mercurial executive of the Pittsburgh-based company stressed that all options were on the table, including a hostile takeover if his counterpart at Akzo Nobel refused to engage with PPG.

Mr McGarry also said that a number of prospective buyers had reached out to the paint-maker expressing their interest in acquiring the European assets that the US company would have to dispose of to satisfy EU antitrust regulators.

Akzo Nobel, which owns the Dulux paint brand, has attempted to buck the trend of consolidation sweeping the wider chemicals sector by vehemently rejecting two takeover offers from PPG over the past month, the most recent for €22.4bn.

It says the proposals undervalued the company and its prospects, would result in significant job cuts and necessitate substantial sell-offs on competition grounds, as the two companies are leaders in many segments of the $130bn paints and coatings market.

But the Dutch paintmaker has faced a chorus of investor dissent, with the hedge fund Elliott leading calls from a number of large shareholders for the Amsterdam-based group to “engage” with its counterpart.

Mr McGarry said the “predominant overlap” between the two companies was in Western Europe.

“There’s a clear and credible path forward. It’s an easy one to get our arms around”.