AkzoNobel offers to acquire Tikkurila for EUR 1.4B, invites negotiation

Akzo Nobel said it has made a "comprehensive non-binding proposal" to acquire Tikkurila. The proposed combination of AkzoNobel and Tikkurila "could create a strong platform for future growth, better able to serve customers with more innovative and sustainable solutions, building on a shared European heritage," the company said. The proposal includes an all-cash public offer for all issued and outstanding shares of Tikkurila at an offer price of EUR 31.25 per share and total equity value of around EUR 1.4B. This represents a premium of 113% to Tikkurila's volume weighted average share price for the undisturbed three-month period ending December 17, 2020 and is 13% higher than the current offer made on January 5, 2021, Akzo noted. 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. The transaction is expected to be earnings accretive in 2022 and will be financed using existing cash and credit lines. AkzoNobel said will continue its current EUR 300M share buyback program and maintains a target leverage ratio of 1-2 times net debt/EBITDA. AkzoNobel "invites the Board of Directors of Tikkurila to enter into negotiations with a view to reaching agreement on a recommended voluntary public cash tender offer."