Akzo to Hand Out $6.4 Billion More to Investors After Split

(Bloomberg) -- Akzo Nobel NV plans to distribute another 5.5 billion euros ($6.4 billion) to shareholders from the sale of its specialty-chemicals business, rewarding investors for a plan that the paint company used to fend off an unwanted takeover approach.

The proceeds will be distributed using a capital repayment and share consolidation of 2 billion euros, a cash dividend of 1 billion euros and a 2.5 billion-euro stock buyback, the Amsterdam-based company said in a statement Tuesday. The paint-and-coatings maker already paid a 1-billion-euro special dividend in December in anticipation of the sale of the chemicals business, which Carlyle Group LP agreed to buy in March.

Akzo Nobel began mulling a sale of the unit in March 2017 as a way to boost the stock price after it rebuffed an unsolicited, 20.9 billion-euro offer from PPG Industries Inc. The shares have returned 37 percent including dividends since then, outpacing the 15 percent return in the Stoxx 600 Chemicals Index.

“This is a clear sign we are delivering on our commitments and focused on creating value for all our stakeholders as a paints and coatings company,” said Chief Executive Officer Thierry Vanlancker. “We consulted many shareholders and evaluated various options to determine an optimal and timely way to return the vast majority of net proceeds following the sale of the specialty-chemicals business.”

The remaining 1 billion euros of net proceeds from the sale will be used for the repayment of debt, costs associated with the transformation, and bolt-on acquisitions. Akzo Nobel has an 800 million-euro bond issue maturing at year-end.

Akzo Nobel shares fell 0.4 percent to 79.86 euros as of 9:18 a.m. local time.

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