27 February 2018Reading time: 2 minutes

Early 2017, AkzoNobel received a unwanted takeover bid from PPG Industries, which was rapidly turned down by the Dutch paint and chemical company. Mid 2017, the American paint producer gave up the fight for the time being. A few months afterwards, AkzoNobel itself placed a bid on Axalta. With this acquisition, the Dutch company hoped to merge with the American peer in order to turn away from PPG for good. Axalta, however, chose to start conversations with Nippon Paint about a possible acquisition. But in the end the Japanese found the American paint manufacturer too expensive. It remains to be seen if AkzoNobel and Axalta will meet again to possibly bundle their strengths.

In the meantime AkzoNobel said that it will mainly focus on the successful divestment of their chemistry division. Last year the division yielded a third of the total revenue of AkzoNobel. Early this year, Bloomberg reported that there are still four companies in the race for the division. Reportedly the company value of the chemistry division is about EUR 10 billion worth. By divesting the division AkzoNobel wants to completely focus on paint and coatings, thus the company.

Early February, AkzoNobel presented their primary results throughout 2017. The paint- and chemical company noted a revenue increase of 3% on an annual basis to EUR 14.6 billion. The operating results increased with 1% to EUR 1.5 billion. AkzoNobel also maintains their long-term goals. The Dutch company wants to realize a profit to revenue ratio of 20% and a return on invested capital of more than 25%. AkzoNobel wants to realize this with structural cost reductions, which should be EUR 110 million in 2018.

Several analysts have raised their taxations for the stock during the past weeks, but a majority maintains a hold advice. Because of this, the consensus for the share is slightly positive. The stock price of AkzoNobel showed a strong decline in the run up to the presentations of the primary annual results but restored strongly afterwards. At this moment the share is traded for approximately EUR 79.50 (23.02.2018), which lies close to the all-time-high stock price over the past six months (EUR 79.78). The future stock price could be influenced by renewed takeover attempts, the selling price of the chemistry division and sector specific developments. Investors should take these facets into account when making investment decisions.

Vontobel products on AkzoNobel are tradable at DEGIRO.

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18/02/2020 17:58:17