AkzoNobel proposes to acquire Tikkurila for €31.25 per share, to create superior and sustainable value for all stakeholders

The proposal includes an all-cash public offer for all issued and outstanding shares of Tikkurila at an offer price of €31.25 per share (“potential offer”) and total equity value of around €1.4 billion. 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.

Thierry Vanlancker, AkzoNobel CEO, commented: “The natural combination of AkzoNobel and Tikkurila would build on centuries of industry experience and a shared European heritage to create significant value for customers, employees, shareholders and other stakeholders. Bringing together our premium brands and leading portfolios would provide customers with a wider range of innovative products and services, including the most sustainable paints and coatings solutions.”

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 Nordic culture and strong presence of Tikkurila in Finland would be reflected in the future organization. The main offices and production facilities of Tikkurila in Finland would become the vital hub for the combined business in the Baltic Sea region and substantial investment would be made in production facilities to supply future growth. Employees and management would benefit from new and exciting career and professional development opportunities, in Finland and the wider organization.

AkzoNobel and Tikkurila have a common approach to sustainability – it’s embedded in the way we operate – and AkzoNobel is widely recognized as the leader in the paints and coatings industry. Joining forces would build on the sustainable purpose of Tikkurila and continue to make a difference for all stakeholders, including local communities.

Thierry Vanlancker continued: “Our complementary geographic profiles would create superior value compared to any other combination, including growth opportunities for the company and its employees. Our collective procurement capabilities, expanded production, and combined sales and distribution channels would deliver substantial value creation. AkzoNobel and Tikkurila would have an exciting and sustainable future together, continuing the recent positive momentum and performance improvement, as a global frontrunner in the industry.”

The transaction is expected to be EPS accretive in 2022, is aligned with the capital allocation priorities of AkzoNobel, and will be financed using existing cash and credit lines. AkzoNobel will continue its current €300 million share buyback program and maintains a target leverage ratio of 1-2x 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.

Implied premia of the potential offer:

• 108% premium compared to the closing price of Tikkurila share on December 17, 2020, the last trading day prior to Tikkurila announcement regarding the tender offer
• 113% premium compared to the volume-weighted average trading price of Tikkurila share during the three-month period prior to December 17, 2020
• 122% premium compared to the volume-weighted average trading price of Tikkurila share during the 12-month period prior to December 17, 2020