AkzoNobel confirms intent to acquire Tikkurila with binding proposal for €31.25 per share, with due diligence supporting value creation opportunity

January 28, 2021

AkzoNobel confirms intent to acquire Tikkurila with binding proposal for €31.25 per share, with due diligence supporting value creation opportunity

Akzo Nobel N.V. (AKZA; AKZOY) has today submitted a binding proposal to the Board of Directors of Tikkurila, having completed its due diligence on the company. The proposal relates to a tender offer for all the issued and outstanding shares of Tikkurila at an offer price of €31.25 per share, representing a total equity value of around €1.4 billion.

On January 18, 2021, AkzoNobel announced it had made a comprehensive non-binding proposal to acquire Tikkurila and 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.

Conducting customary due diligence has confirmed the AkzoNobel view that clear synergies would be created from collective procurement capabilities, expanded production, and combined sales and distribution channels. The combination would deliver substantial value creation for shareholders and also create significant opportunities for future growth – both for the company and its employees – by providing customers with more innovative and sustainable solutions.

The proposed transaction is consistent with the capital allocation priorities of AkzoNobel, is expected to be EPS accretive in the first year and value creating in the medium-term. The proposal is not conditional on financing – it would be financed using existing cash and credit lines – and AkzoNobel maintains a target leverage ratio of 1-2x net debt/EBITDA.

Key terms for launch and completion of an offer

The making of the potential tender offer, if any, depends on the satisfaction of the below pre-conditions. If the process advances quickly, an offer could be announced in February and AkzoNobel would envisage the offer period to begin as soon as possible in March. The transaction would be expected to be completed during 2021.

The binding proposal is conditional on (1) AkzoNobel and Tikkurila entering into a combination agreement pursuant to which the Board of Directors of Tikkurila recommends to the shareholders of Tikkurila that they accept AkzoNobel's tender offer and (2) obtaining an irrevocable undertaking from Oras Invest Oy to accept AkzoNobel's tender offer. The binding proposal is not conditional on due diligence or the approval by AkzoNobel's Supervisory Board, which has approved the submission of this binding proposal to Tikkurila.