Recently, PPG announced that the company and Tikkurila's acquisition offer started on January 15 to continue, the purchase price increased, and major shareholders promised to sell shares to PPG.
PPG and Tikkurila announced that the two companies have reached an amendment to the previously announced final merger agreement to amend PPG’s offer to acquire all issued shares of Tikkurila in cash. According to the revised agreement, Tikkurila’s shareholders will receive 34.00 euros per share in cash from the shares they sell, and the total transaction amount is approximately 1.52 billion euros, including debt and cash commitments.
Tikkurila received Akzo Nobel’s competitive offer on January 28, 2021, which prompted PPG to revise the offer. Tikkurila confirmed that before PPG issued its proposed acquisition of Tikkurila in December 2020, the company and Akzo Nobel had discussed relevant matters as early as the fourth quarter of 2020.
Based on PPG's revised tender offer, some of Tikkurila's major shareholders, who hold a total of approximately 29.34% of the equity, have unconditionally committed to sell their shares to PPG subject to the approval of the relevant regulatory authorities.
PPG's revised tender offer stipulates the increase in the price per share and the terms and conditions of other equity expansion, including:
Compared with Akzo Nobel’s competitive offer, the premium is 8.8%, maximizing the value of all Tikkurila shareholders;
The transaction is expected to be completed as early as March 2021 or the beginning of the second quarter;
The regulatory approval process is consistent with the expected completion time of the acquisition, which is much faster than the transaction timetable proposed by Akzo Nobel, so that the transaction is expected to be completed before the peak business season of Tikkurila's second and third quarters;
In order to improve the certainty of the transaction, lower the threshold for acceptance of takeover offers from 90% to 66.7%, and provide additional regulatory commitments in certain aspects;
Tikkurila’s overall structure will not be affected in any way, so as to provide Tikkurila’s business, employees and stakeholders with a clearer and better future, and to ensure that certain businesses that include Tikkurila’s assets are avoided. The divestiture operation caused business interruption or operational chaos, the uncertainty of the regulatory process, and the possible extension of the acquisition completion time as a result of the Akzo Nobel acquisition proposal.
Based on consideration of price, certainty, timing and stakeholders, Tikkurila’s board of directors has determined that PPG’s revised takeover offer is superior to AkzoNobel’s competitive offer. Therefore, Tikkurila’s board of directors unanimously recommended that Tikkurila’s shareholders accept PPG. The revised offer.
Michael McGarry, Chairman and CEO of PPG, said: “From the perspective of strategy and shareholder value creation, the acquisition of Tikkurila remains an attractive opportunity for PPG. Our revised offer is based on our understanding of potential transactions. In-depth analysis of synergies and our confidence in the value created by the merger of the two companies. We thank Tikkurila’s board of directors for evaluating the integrity and fairness of the two companies’ acquisition offers. They have reached an appropriate conclusion, PPG The revised offer is obviously more advantageous, faster to complete, simpler to execute, and more certain, and it is in the best interests of Tikkurila and all its stakeholders, especially in the interests of employees. We look forward to putting Tikkuri in early this year. The merger of La and PPG into one company benefits our customers, employees and communities."
The tender offer for all shares has started on January 15 and is expected to be completed on March 15 unless it is extended by PPG. PPG expects the transaction to be completed as early as March 2021 or early second quarter, depending on customary closing conditions. Tikkurila has announced that the company's operating income in 2020 will increase by 3% to approximately 582 million euros.
