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4-Traders Homepage  >  Equities  >  Euronext Amsterdam  >  AkzoNobel    AKZA   NL0000009132

AKZONOBEL (AKZA)
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Exclusive - Akzo Nobel approaches Axalta about possible merger - sources

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10/27/2017 | 08:36pm CET
Empty Dulux paint cans wait to be filled inside AkzoNobel's new paint factory in Ashington, Britain

FRANKFURT/NEW YORK (Reuters) - Dutch paints and coatings giant Akzo Nobel NV (>> AkzoNobel) has approached U.S. rival Axalta Coating Systems Ltd (>> Axalta Coating Systems Ltd) to discuss a possible merger that would create a global coatings giant, according to sources familiar with the matter.

FRANKFURT/NEW YORK (Reuters) - Dutch paints and coatings giant Akzo Nobel NV (>> AkzoNobel) has approached U.S. rival Axalta Coating Systems Ltd (>> Axalta Coating Systems Ltd) to discuss a possible merger that would create a global coatings giant, according to sources familiar with the matter.

Akzo Nobel's move indicates that its new CEO Thierry Vanlancker is continuing to look for big deals as a way to buttress the company, after it managed to fend off a takeover approach by PPG Industries (>> PPG Industries, Inc.) earlier this year.

Philadelphia-based Axalta is in the early stages of considering a deal with Akzo Nobel, and there is no certainty that the two companies will agree to a merger, one of the sources said on Friday.

The sources asked not to be identified because the negotiations are confidential. Akzo Nobel and Axalta did not respond to requests for comment.

Shares in Axalta soared nearly 22 percent on the news and were last up 18 percent at $33.27 in early afternoon trading, giving the company a market capitalisation of $8.1 billion (6.17 billion pounds). Akzo Nobel's shares had finished flat in Amsterdam, valuing it at 19.5 billion euros.

Earlier this year, the Dutch maker of Dulux rejected a 26-billion euro acquisition offer from U.S. rival PPG. As an alternative transaction, Akzo Nobel has announced it plans to sell or spin off its specialty chemicals division, which represents about a third of sales and profits.

Such a divestiture will concentrate Akzo on coatings, and so a tie-up with Axalta, the No. 1 supplier to the North American heavy truck market, would round out its business to include vehicle coatings.

PPG CEO Michael McGarry said on the company's third-quarter earnings call earlier this month that, when it came to Akzo Nobel, PPG had "moved on." A PPG spokesman declined to comment on Friday on how the company will respond to Akzo Nobel's merger discussions with Axalta.

A tie-up with Axalta, the former car paint unit of DuPont, is be the major first merger being pursued by Vanlancker, who took over as Akzo Nobel CEO when Ton Buechner resigned for health reasons in July.

Vanlancker has cut Buechner's profit goals, made in the heat of the takeover battle, twice in the space of six weeks, blaming disruption caused by hurricane Harvey, rising raw materials costs and "headwinds" at its marine coatings business.

He has also focused on trying to cultivate Akzo Nobel's investor base. Having won a court case in which activist investor Elliott Advisors sought but failed to get the removal of president Antony Burgmans, Akzo Nobel pledged to mend its relationship with shareholders.

Private equity firm Carlyle Group LP (>> The Carlyle Group LP), Axalta's former owner, had considered selling the company to Akzo in 2014 before taking it public.

(Additional reporting by Pamela Barbaglia in London and Arno Schuetze in Frankfurt; Editing by Nick Zieminski)

By Ludwig Burger and Greg Roumeliotis

Stocks mentioned in the article
ChangeLast1st jan.
AXALTA COATING SYSTEMS LTD 2.95% 31.81 Delayed Quote.-3.31%
PPG INDUSTRIES 1.38% 117.46 Delayed Quote.-1.03%
THE CARLYLE GROUP LP -0.43% 23.15 Delayed Quote.0.44%
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Financials (€)
Sales 2017 14 595 M
EBIT 2017 1 522 M
Net income 2017 893 M
Debt 2017 1 932 M
Yield 2017 7,83%
P/E ratio 2017 22,66
P/E ratio 2018 20,48
EV / Sales 2017 1,51x
EV / Sales 2018 1,49x
Capitalization 20 154 M
Chart AKZONOBEL
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AkzoNobel Technical Analysis Chart | AKZA | NL0000009132 | 4-Traders
Technical analysis trends AKZONOBEL
Short TermMid-TermLong Term
TrendsBullishBullishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 18
Average target price 82,1 €
Spread / Average Target 2,9%
EPS Revisions
Managers
NameTitle
Thierry F. J. Vanlancker Chief Executive Officer
Antony Burgmans Chairman-Supervisory Board
Maarten de Vries Chief Financial Officer
Peggy Bertha Bruzelius Member-Supervisory Board
Louis R. Hughes Member-Supervisory Board
Sector and Competitors
1st jan.Capitalization (M$)
AKZONOBEL9.39%24 791
SHERWIN-WILLIAMS-3.15%37 137
PPG INDUSTRIES-1.03%29 423
ASIAN PAINTS-3.71%16 539
NIPPON PAINT HOLDINGS CO LTD4.93%11 397
AXALTA COATING SYSTEMS LTD-3.31%7 623