A former European Commission director-general has cast doubt over some of AkzoNobel’s reasoning for refusing to enter takeover talks with a US rival.
Sir Philip Lowe, who was director-general for competition between 2002 and 2010, has dismissed the suggestion that political opposition to a takeover in the Netherlands could have any bearing in a Brussels anti-trust probe.
The Dutch company, which owns Dulux, rejected two takeover offers from PPG Industries last month. A number of shareholders, led by activist Elliott Advisors, have condemned Akzo for refusing to even engage in talks with PPG.
The company has explained several reasons for its refusal to discuss the PPG approach, including predicting a long and drawn-out process to win anti-trust approval from the European Union.
AkzoNobel chairman Antony Burgmans has also suggested that strong political opposition in the Netherlands would play a role in this process.
“If there is no political support that makes the competition issue even more difficult. Because if Brussels thinks there is no political support, they will be even more critical than they already are,” he told Bloomberg. “They have made their life even more difficult in Brussels. Brussels will take a very critical approach of this. They will listen to the Dutch political establishment.”
Burgmans was speaking in the experience of having worked on the acquisition of Dutch TNT Express by United Parcel Service, which was blocked by the European Commission in 2013.
This argument has been dismissed by Lowe, who told City A.M.: “The assessment of a merger by the European Commission is limited by law, with very limited exceptions, to its impact on competition and the ultimate benefits or costs for consumers.
“Support or opposition at a political level for a merger may influence the determination of the merging companies to pursue the deal but will not influence the European Commission’s decision.”
AkzoNobel has also said that the deal would, under Dutch law, need to be in the best interest of all stakeholders, including shareholders, employees, customers and the nation.