AkzoNobel plans to spin off Specialty Chemicals unit

Paterniano Del Favero
Aprile 20, 2017

The world's leading paintmaker AkzoNobel Wednesday unveiled plans to shed its specialist chemicals division as it fends off a hostile U.S. takeover bid, buoyed by stronger-than-expected first quarter profits.

Operating profit was up 13 percent to 376 million euros from 334 million euros in the same period a year earlier.

The company, which employs around 46,000 people, declined comment on possible job losses resulting from its plans.

Quarterly revenue rose 7% to EUR3.67 billion, mainly as a result of higher volumes and acquisitions.

According to Zacks, "AkzoNobel is a leading global paints and coatings company and a major producer of specialty chemicals".

Sales were also up by seven per cent at 3.7bn euros.

As part of its presentation on Wednesday, the company noted it aims to become carbon neutral by 2050 and it will spend 1 billion euros on research and development by 2020.

Most of the profits from the move are to be returned to shareholders, said Buchner, who has been under pressure to step down.

Buechner said the company has not yet decided whether it will agree to a request by a significant number of shareholders to hold an extraordinary general meeting to debate and vote on the dismissal of Chairman Antony Burgmans.

"It will be delivered at pace, with a clear timeline and is in the best interest of all stakeholders". AkzoNobel stated in a press release: "It will generate superior, faster and more certain value creation than the alternatives and with substantially fewer risks, uncertainties and social costs".

PPG on Monday sent an open letter to shareholders seeking to win them over, saying it had "a long and steadfast history of taking consistent strategic actions to grow our business".

The tussle over the company comes just after another giant, the Anglo-Dutch Unilever, successfully fought off an unsolicited bid by the United States food and consumer behemoth Kraft Heinz.

Akzo Nobel NV has outlined a new strategy which will see its Specialty Chemicals unit separated into a new business unit and divested within 12 months.

AkzoNobel is also planning to reduce costs by an annual €150m while expenditure will decrease by another €50m a year once the chemicals division is sold off.

Shares fell 0.3 percent to 78.07 euros at 9:20 a.m.in Amsterdam.

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