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Tikkurila board recommends revised bid from PPG

January 15/2021

MOSCOW (MRC) -- The board of Tikkurila (Helsinki, Finland) says it “unanimously recommends” that the company’s shareholders accept a planned tender offer for the company from PPG Industries, reported Chemweek.

PPG’s offer will be at EUR27.75/share, valuing Tikkurila at about EUR1.24 billion (USD1.50 billion), after PPG raised its bid price on 5 January in response to a competing offer from an unspecified company. The Tikkurila board says in a statement that its assessment of PPG’s revised bid took the rival offer into consideration.

PPG’s original offer price, announced on 18 December, was EUR25.00/share. PPG and Tikkurila confirmed with that announcement that PPG would make a recommended voluntary public cash tender offer to acquire all the issued and outstanding shares in Tikkurila. The tender offer is due to be published on or about 15 January.

The Tikkurila board has also confirmed that some of the company’s major shareholders, representing in aggregate approximately 29.39% of the shares and votes in the company, have, subject to certain customary conditions, irrevocably undertaken to accept PPG’s tender offer at the revised price. The shareholders are Oras Invest, Varma Mutual Pension Insurance Co., Mandatum Life Insurance Co., and Kaleva Mutual Insurance Co.

Completing the tender offer is subject to certain conditions, including PPG gaining acceptance from shareholders representing more than 90% of the shares and voting rights in Tikkurila. If PPG passes this threshold, it intends to initiate proceedings, under Finnish law, to acquire the remaining shares in Tikkurila, causing Tikkurila’s shares to be delisted from the Nasdaq Helsinki exchange “as soon as permitted and practicable under applicable laws and regulations,” the Tikkurila board says.

The tender-offer period is expected to expire on or about 15 March and the offer is expected to be completed during the first half of 2021, the Tikkurila board says.

PPG “sees significant value and potential in Tikkurila and accordingly expects to make substantial investments in the company’s infrastructure and people, as well as provide the company with access to PPG’s  global diversified paints, coatings, and specialty coatings offering, on which Tikkurila will be able to build and further deepen its customer relationships, develop lateral products, and access additional markets,” says the Tikkurila board’s statement. “Upon the completion of the tender offer, PPG expects to position Tikkurila and its various brands as PPG’s platform to the Nordic and Baltic countries, Russia, and potentially beyond.”

PPG also expects to maintain Tikkurila’s corporate offices in Finland and various production, distribution, and sales centers in the Nordic countries. PPG “intends to continue to invest in Tikkurila’s employees and potentially provide larger roles for many of its key executives,” the statement says. PPG sees Tikkurila’s “strong distribution capability as a platform to significantly grow many of PPG’s legacy products in its protective and marine, refinish, and light industrial coatings businesses and expand Tikkurila’s and PPG’s combined presence in the countries where Tikkurila is active,” it says.

The Tikkurila board says the company can benefit from PPG’s “complementary products, capabilities, technologies, and expertise to deliver enhanced value to customers.” It shares PPG’s view “that the combined company would have the capabilities to deliver a more extensive offering to its clients, offer new possibilities for its employees, and provide a platform for future growth through additional geographical reach and market position.”

The board notes, however, that the tender offer “may have an effect on employment (at Tikkurila) particularly with regard to overlapping functions.”

As MRC informed previously, in February 2020, PPG said it had completed its acquisition of Industria Chimica Reggiana (ICR, Reggio Emilia, Italy), a maker of automotive refinish products. Financial terms of the deal, including purchase price, were not disclosed. The deal was announced on 8 January. ICR was founded in 1961 and employs about 180 people. ICR manufactures automotive refinish products, including putties, primers, basecoats and clear coats. It also makes a range of coatings, enamels and primers for light commercial vehicles and other light industrial coatings applications. ICR employs about 180 people and sells its products in more than 70 countries in Europe, Africa, the Middle East, the US and Latin America.

We remind that Russia's output of chemical products rose in November 2020 by 9.5% year on year. At the same time, production of basic chemicals increased in the first eleven months of 2020 by 6.6% year on year, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-November 2020 output. November production of polymers in primary form rose to 896,000 tonnes from 852,000 tonnes in October. Overall output of polymers in primary form totalled 9,240,000 tonnes over the stated period, up by 17.1%  year on year.
Author:Margaret Volkova
Tags:Europe, coatings, car components, paints and coatings, PPG, Tikkurila, Russia, USA.
Category:General News
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