AkzoNobel CEO Faces Shareholder Revolt

Newly appointedAkzoNobel CEO Thierry Vanlanckertakes over the Dutch paint company at a time when it faces an ongoing battle with its biggest shareholder, Elliott Management, and several hostile takeover attempts from US rival PPG Industries.

AkzoNobel Thierry Vanlancker
AkzoNobel CEO Thierry Vanlancker

New AkzoNobel CEO Thierry Vanlancker has a tough road ahead as he seeks to protect the besieged Dutch paint and coatings maker from militant shareholders and a fourth hostile takeover bid.

Vanlancker, 52, joined AkzoNobel in 2016 to head its chemicals division and was appointed CEO when his predecessor, Ton Büchner, stepped down suddenly, citing health reasons. Prior to AkzoNobel, Vanlancker was president of fluoroproducts for Chemours (the spin-off of DuPont’s chemical businesses, formed in 2015). He joined DuPont in 1988 and has held a number of senior positions in both Europe and the US.

Having survived three hostile takeover attempts from US rival PPG Industries earlier this year, AkzoNobel, valued at $29 billion by PPG, is facing an ongoing battle with its biggest shareholder, Elliott Management, which manages $33 billion in assets.

To prevent the merger with PPG, Büchner and AkzoNobel chairman Antony Burgmans promised higher sales and margins, which Elliott insists are unachievable. Since then, the sniping has not abated, with Akzo refusing to engage with activists at a recent meeting and Elliott attempting to oust Burgmans through the courts, as well as demands that Vanlancker and the board clarify their views on the separation of the speciality chemicals business and the credibility of Akzo’s 2020 targets.

According to Joost van Beek, senior equity analyst at Theodoor Gilissen Bankiers, financial targets—such as an earnings before interest and taxes margin of 14% by 2020—are very ambitious and unlikely to be met if economic conditions deteriorate. “We have already seen the UK market worsening,” he says. “Furthermore, stiffer pricing competition is also a key risk. The opportunities to divest the specialty chemicals business at an attractive price [some €10 billion] could diminish if the stock market retreats, as an IPO is one of the key opportunities. Finally, chairman Burgmans will step down in April 2018: Will his successor be similar in his/her views regarding independence?”