Dutch paints and coatings manufacturer AkzoNobel has made a non-binding proposal to acquire Finland’s Tikkurila.

The proposal includes an all-cash public offer for all issued and outstanding shares of Tikkurila at an offer price of €31.25 per share and total equity value of around €1.4 billion.

In a press release, AkzoNobel said: “The proposed combination of AkzoNobel and Tikkurila would create a strong platform for future growth, better able to serve customers with more innovative and sustainable solutions, building on a shared European heritage.

Thierry Vanlancker, AkzoNobel CEO, commented: “The natural combination of AkzoNobel and Tikkurila would build on centuries of industry experience and a shared European heritage to create significant value for customers, employees, shareholders and other stakeholders. 

“Bringing together our premium brands and leading portfolios would provide customers with a wider range of innovative products and services, including the most sustainable paints and coatings solutions.”

To obtain merger clearance and ensure deal certainty for Tikkurila and its shareholders, AkzoNobel has agreed with Hempel key terms for the sale of assets, including the decorative paints business of AkzoNobel in the Nordics and the Baltics, to be completed after closing of AkzoNobel’s proposed public offer for Tikkurila.

Thierry Vanlancker continued: “Our complementary geographic profiles would create superior value compared to any other combination, including growth opportunities for the company and its employees. 

“Our collective procurement capabilities, expanded production, and combined sales and distribution channels would deliver substantial value creation. AkzoNobel and Tikkurila would have an exciting and sustainable future together, continuing the recent positive momentum and performance improvement, as a global frontrunner in the industry.”

The transaction is expected to be EPS accretive in 2022, is aligned with the capital allocation priorities of AkzoNobel, and will be financed using existing cash and credit lines. AkzoNobel will continue its current €300 million share buyback program and maintains a target leverage ratio of 1-2x net debt/EBITDA.

AkzoNobel invited the board of directors of Tikkurila to enter into negotiations with a view to reaching agreement on a recommended voluntary public cash tender offer.

The bid is an attempt to trump the offer made by US-based PPG Industries. Their offer was €1.1billion in December and said its offer was expected to close in the second quarter of 2021.

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