By Ian Walker 

Dutch paints and chemicals maker Akzo Nobel NV said Thursday it has rejected an unsolicited EUR20.9 billion ($22.1 billion) offer from U.S. peer PPG Industries Inc., the latest sign of consolidation in the industry.

Amsterdam-based Akzo said PPG made an offer of EUR54 in cash and 0.3 PPG shares for each Akzo share, corresponding to a value of EUR83 a share.

Akzo, which counts Dulux, Sikkens, Interpon and Eka among its brands, said PPG's proposal substantially undervalues the company and isn't in the interest of its shareholders.

The offer comes amid a period of consolidation in the chemicals industry. U.S. giants Dow Chemical Co. and DuPont Co. are in the process of finalizing a $120 billion merger, and have offered to sell businesses to gain approval from the European Union's antitrust regulator.

The proposal isn't the first time PPG has courted Akzo. In 2012, the Pittsburgh-based company bought Akzo's North American house-paint business for $1.05 billion.

Akzo said Thursday it now plans to review options for the separation of its specialty-chemicals business, which generated revenue in 2016 of EUR4.8 billion. It said it would consider various alternative ownership structures for the unit, including a new independent listed entity.

PPG in December launched a restructuring program in an effort to save $120 million to $130 million a year because of a slowdown in global demand and weaker-than-expected growth in Europe.

Akzo became one of the world's largest paints makers after it acquired U.K. rival Imperial Chemical Industries Ltd. in 2008 for GBP8 billion ($12.9 billion).

The Dutch company struggled to digest the debt-financed acquisition, which raised its exposure to Europe's troubled automotive and construction industries, culminating in a series of profit warnings in 2011. It has since slashed costs and laid off staff.

At close of business Wednesday, Akzo had a market capitalization of $17.12 billion, while PPG's was $27.47 billion.

Write to Ian Walker at ian.walker@wsj.com

 

(END) Dow Jones Newswires

March 09, 2017 03:00 ET (08:00 GMT)

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