Dutch coatings firm, Akzo has today confirmed it is in “constructive discussions” with US rival Axalta with a view to creating a “leading global paints & coatings company through a merger of equals”.
Akzo made its statement this morning in “in response to market speculation”, it said, as it also confirmed that the separation of its Speciality Chemicals division still remains on track for April 2018.
Commenting on the news, Axalta explained that it, “will pursue such a transaction only if its board of directors determines that it is in the best interest of Axalta to do so.”
Talks are still in the early stages and Axalta added that, “there can be no assurances that a definitive agreement between the parties will be reached or on what terms.”
The announcement follows an unsuccessful takeover attempt by PPG Industries earlier this year, when Akzo declined a €26.9billion offer from the American company. The firm, which owns the Dulux, Polycell, Hammerite and Cuprinol brands, came under pressure from its board for rejecting the lucrative offer and tensions were high, resulting in legal proceedings. The board has since agreed a three-month standstill on any litigation with one of its shareholders, Elliott Advisors.
Pressure may again be mouting for Akzo, which has since issued two profit warnings but asserts it is still on track to deliver the shareholder benefits promised for the separation of its Speciality Chemicals division.
The move with Axalta could be an attempt to ward off another potential run on the company from PPG, which woudl be able to renew its takeover bid from December 1 under Dutch takeover rules.