AkzoNobel unveils strategic plan to "deliver superior shareholder value"... and it likely won't need shareholder sign-off

Oliver Gill
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Putting a lid on it: AkzoNobel hopes today's plans will quell investor unease

AkzoNobel today revealed it will return €1.6bn (£1.3bn) to investors as part of a plan to woo them into backing a strategic plan to split its business in two.

The move is the latest chapter of its ongoing ding-dong with institutional investors over a potential €22bn merger with US rival PPG.

The Dutch owner of brands including Dulux and Hammerite said its speciality chemicals operations would be spun off within the next 12 months as part of the plans, with the "vast majority" of proceeds returned to shareholders.

While the finer details of the spin-off are yet to be ironed out, a spokesperson for the firm said in the majority of scenarios, AkzoNobel will not need to get shareholder approval for the sweeping changes.

Read more: No Bank Holiday rest for AkzoNobel: PPG writes to firm's stakeholders

At the firm's other division, paints and coatings, AkzoNobel said it will generate €150m of annual savings and generate a further €50m as a result of the speciality chemicals spin-off.

Activist investor Elliott has pushed for AkzoNobel to entertain the idea of talks with PPG for several weeks, after the Dutch firm rejected two offers from the US firm last month. It has corralled several other large institutional investors to openly come out in favour of opening discussions.

AkzoNobel has steadfastedly rejected the calls, preferring to plough on with developing the plans it has unveiled today.

Earlier this month shareholders rounded on Antony Burgmans, the chairman of AkzoNobel's supervisory board, to resign in the wake of the firm's rejection of their calls to meet with PPG.

And today, Burgmans stuck to his guns in saying this was the right plan. He said:

The supervisory board believes that management's plan for AkzoNobel's future will deliver superior shareholder value compared to the alternatives.

Read more: More trouble at AkzoNobel: Major shareholder backs Elliott call for vote

AkzoNobel chief exec Ton Buchner said the plans represented a "commitment to substantial shareholder returns" and added:

"It will be delivered at pace, with a clear timeline and is in the best interest of all stakeholders.

Now is the right time to create two focused, high-performing businesses. This strategy will create substantial value for shareholders with significant less risks and uncertainties compared to alternatives.

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