Germany: Speciality Chemicals Akzo Nobel Separates Speciality Chemicals Business
Akzo Nobel unveiled a new strategy to accelerate growth and value creation focussing on the company's Paints, Coatings and Specialty Chemicals Business. The next phase is the separation of Speciality Chemicals and the creation of two separate companies within twelve months.
Ibbenbüren/Germany — The company expects a superior, faster and more certain value creation than the alternatives with fewer risks, uncertainties and social costs. The dual track process includes the active consideration of a separate listed entity or sale of a business unit. Akzo Nobel also reported a record financial performance with its first quarter 2017 results.
Antony Burgmans, Chairman of the Akzo Nobel Supervisory Board, said: "The Supervisory Board believes that management's plan for Akzo Nobel's future will deliver superior shareholder value compared to the alternatives. The plan will enable Akzo Nobel to thrive both to the benefit of our shareholders and the communities worldwide in which we operate."
The chemical company estimates that the separation of Speciality Chemicals leads to additional cost savings of € 50 million. Furthermore, the company reiterated their continued commitment to sustainability with the aim to use 100 % renewable energy and be carbon neutral by 2050. The growth plan includes the investment of one billion Euro in research and development by 2020 to maintain their focus on innovation and new product development. Additionally, Akzo Noble will pay one billion Euro in special dividend in November, reflecting their confidence in the planned separation.
Ton Büchner, CEO of Akzo Nobel, said: "Our commitment to substantial shareholder returns reinforces our belief that the plan we are outlining will create a step change in value creation, generating significant shareholder value in the short, medium and long term. It will be delivered at pace, with a clear timeline and is in the best interest of all stakeholders. The industry-leading performance and outlook of our Specialty Chemicals business gives us the confidence to return proceeds to shareholders in advance of the separation. In addition, we see extensive growth momentum in our Paints and Coatings business, which we expect to keep growing faster than market rates, allowing us to improve our long-term financial guidance."