US firm PPG scrubs bid to takeover AkzoNobel

US coatings firm PPG announced Thursday it was abandoning its bid to take over its Dutch rival, the world's leading paintmaker AkzoNobel, in the wake a bitter court battle.

In a statement, the Pittsburg-based PPG said: "It has withdrawn its proposal to combine with AkzoNobel and will not pursue a public offer for all the issued and outstanding shares of AkzoNobel."

The Amsterdam-based AkzoNobel has in recent months rejected three takeover offers from PPG, the last of which would have valued the company at around 24.6 billion euros ($27 billion).

In a further blow to PPG, the Dutch Enterprise Chamber on Monday threw out a bid by a minority group of AkzoNobel shareholders supportive of the takeover bid to force the holding of an extraordinary meeting aimed at ousting the firm's chairman of the board, Antony Burgmans.

PPG chief executive Michael McGarry said the US company had been "hopeful" AkzoNobel "would see the merits of our compelling proposal to combine our two great companies and create significant shareholder value".

However, the Dutch company had "consistently refused to engage" and therefore "we believe it is in the best interests of PPG and its shareholders to withdraw our proposal to AkzoNobel at this time."

Under Dutch financial regulations, PPG had until Thursday to either submit a formal bid without AkzoNobel's approval or walk away for a six-month "cooling-off" period.

AkzoNobel, formed in 1994 from the merger of the Dutch and Swedish firms Akzo and Nobel, said in a statement Thursday that it "notes" PPG's announcement.

"We continue to focus on our business, pursuing our strategy of accelerating sustainable growth and profitability," chief executive Ton Buchner said.

In a bid to appease shareholders, the company unveiled plans in April to shed its specialist chemicals division within 12 months, ploughing most of the profits into shareholder dividends.

It has also vowed to splash out a special one-billion-euro dividend on shareholders in November.

Spinning-off the chemicals division, will "lead to a step change in growth and long-term value creation for our shareholders and all other stakeholders," Buchner added in his statement Thursday.

From the beginning, AkzoNobel had maintained the PPG bid undervalued the group and "contained significant risks and uncertainties" as well as failing to provide guarantees for its 46,000 workers.

It has also stood by Burgmans, saying dismissing him would be "irresponsible, disproportionate (and) damaging".