Dutch paints and coatings maker Akzo Nobel rejected a $22 billion bid from larger U.S. rival PPG Industries on Thursday. Fred Katayama reports
PPG Industries made a $22 billion bid for Dutch paint and coatings maker Akzo Nobel, but Akzo rejected it. The bid carried a 29 percent premium to Akzo's closing price on Wednesday. But the company's management said PPG's offer didn't "reflect the long-term value creation potential of the company." It also said cost savings were uncertain and that there's a good chance regulators could block the deal. PPG's CEO said a marriage would create - in his words - a "very compelling strategic opportunity." PPG shares dropped on the news. Analyst Dmitry Silversteyn covers PPG at Longbow Research. (SOUNDBITE) DMITRY SILVERSTEYN, VICE PRESIDENT & SENIOR ANALYST, LONGBOW RESEARCH (ENGLISH), SAYING: "I think PPG will continue to work the deal, continue to try to talk Akzo board to accept this friendly takeover, look at the books, and, perhaps, drum up their price, increase their offer price, if what they find justifies it. It's not surpassing that the first offer out of the box, without having access to company's financials, beyond the publicly available data, seems a little low to Akzon board." PPG's offer came just days before a general election to the House of Representatives in the Netherlands. With nationalist sentiment on the rise, the vulnerability of Dutch companies to foreign takeovers has been an issue.