AMSTERDAM (Reuters) - Elliott Advisors, the Akzo Nobel (AKZO.AS) shareholder that has been pushing for the company to enter takeover talks with U.S. rival PPG Industries (PPG.N), said on Friday Akzo will lose up to 6,400 jobs under the independence plan it has put forward as an alternative.
Elliott, an activist shareholder holding a 3.25 percent stake in Akzo, commissioned a study that argues the job losses required by Akzo’s independence plan, which involves selling or floating its chemicals division, would be four times greater than what it would be if PPG and Akzo were to combine.
Akzo has twice rejected takeover proposals from PPG and is weighing whether to enter talks on a third worth 26.2 billion euros ($28.8 billion) at current prices.
Akzo spokesman Leslie McGibbon described the Elliott report as an “imaginative work of fiction.” He said Akzo has in recent years cut costs “through process allowances, with little or no impact on jobs,” a trend which the company expects to continue after it splits off the chemicals division, which represents around a third of the company’s sales and profits.
It is not possible to evaluate using publicly available information which plan would be better for employees.
Akzo has declined to specifically say how many jobs would be lost by splitting specialty chemicals. PPG has said it would not cut any jobs at specialty chemicals if it were to buy Akzo. However, it intends to achieve $750 million euros in ‘synergies’ by combining the companies’ paints and coatings businesses, implying some job losses.
Akzo has said that under its independence plan it will cut 200 million euros in costs per year in the coming years. Of that, 150 million euros will be at its paints and coatings businesses and 50 million euros at its chemicals businesses.
Akzo’s Dutch labor unions have said they cannot weigh competing claims by the two companies and have signaled their willingness to talk to PPG.
McGibbon said the company is still considering whether to engage in takeover talks with PPG and would inform markets “in due course.”
In recent years PPG’s employee base has grown, mostly due to acquisitions, while Akzo Nobel’s has shrunk as CEO Ton Buechner cut costs and sold the company’s American decorative paint operations -- to PPG.
Reporting by Toby Sterling; Editing by Sunil Nair