AkzoNobel (AEX: AKZA) has decided to shop its €4.8 billion specialty chemicals business to potential buyers. The announcement came just a day after the Dutch maker of paints, coatings and chemicals rejected a roughly €21 billion offer to be acquired by US rival PPG Industries (NYSE: PPG). PPG bid €54 and 0.3 PPG shares per AkzoNobel share for a total value of roughly €83 per share, a 30% premium to the target’s closing price on February 28. AkzoNobel stock ended last week up nearly 5%.
Going forward, would-be buyers from outside Europe could face even greater barriers to entry as the European Commission considers expanding its ability to block acquisitive approaches from a non-EU company or one of its EU-based surrogates if driven “just for the purpose of disposing its overcapacity,” per Reuters. Translation: unsolicited bids like PPG’s or Kraft Heinz’s $143 billion offer to acquire Unilever last month look even more likely to fail in future.
European M&A by foreign buyers this year (announced/in bidding)
Qualivian Investment Partners Up 30% YTD; Long ORLY Thesis
Qualivian Investment Partners commentary for the second quarter ended July 30, 2020. Q2 2020 hedge fund letters, conferences and more “Short-term investors will accept a 20% gain because they didn’t spend the time to develop the conviction and foresight to see the next 500%.” - Ian Cassell Executive Summary Readers of investment letters fall into Read More
Since the start of the year, non-European companies have announced deals with or bid on 43 European targets, according to data from the PitchBook Platform. The combined value of deals that included a disclosed sticker price total about €35 billion, driven almost entirely by the massive $30 billion deal struck between Johnson & Johnson (NYSE: JNJ) and Actelion (SIX: ATLN) at the end of January.
With one version of the proposal from the Commission’s industry department aiming to increase scrutiny of defense, infrastructure and technology, deals in B2C still look like the sort of thing that will remain a safe bet, even as those in IT, energy and materials & resources may merit more attention from regulators in the future.
PitchBook Platform users can click here to view the list of 43 deals for further analysis.
Article by Adam Putz, PitchBook