Elliott Advisors (UK) Limited Releases Independent Research Forecasting Approximately 6,400 Redundancies in Akzo Nobel Stand-alone Scenario

AMSTERDAM, LONDON and NEW YORK, May 5, 2017 /PRNewswire/ --

Elliott, a private investment firm founded in 1977, and its affiliates ("Elliott"), a top 5 shareholder of Akzo Nobel N.V. ("Akzo Nobel" or the "Company"), is today releasing third-party independent research concluding that over four times the number of Akzo Nobel employees could be made redundant by a stand-alone Akzo Nobel, compared to a potential combination of Akzo Nobel with PPG Industries, Inc. ("PPG").

Akzo Nobel has made stakeholder protection a centrepiece of its rationale for refusing to engage with PPG. The employees of Akzo Nobel are one of those key stakeholder constituencies. Elliott believes there is a strong probability that Akzo Nobel employees would have greater job security and significantly more growth opportunities in a combined PPG and Akzo Nobel scenario than they would under the stand-alone scenario communicated by Akzo Nobel in its Investor Day on 19 April. Elliott would like to remind stakeholders that since 2009, Akzo Nobel has made 11,970 employees redundant, a figure which excludes further rationalizations made in 2015 and 2016, which Akzo Nobel chose not to report.

At Akzo Nobel's Investor Day on 19 April, Akzo Nobel's management claimed 3.4 percentage points of margin expansion can be achieved between today and 2020 by a stand-alone Akzo Nobel, with a separate Specialty Chemicals business.  Critically, however, Akzo Nobel failed to substantiate how this increase would be achieved, and most notably, failed to indicate the number of employee redundancies required to achieve this guidance. Since Akzo Nobel chose not to disclose this important detail, Elliott asked ChemQuest, a leading chemicals consulting firm which has been working with Elliott since January 2017, to expand the scope of its work and to produce an estimate^[1] of likely required redundancies. This estimate concludes that approximately 6,400 redundancies may be required to achieve Akzo Nobel's margin guidance. The analysis also indicates that it is likely that the level of employee redundancies resulting from a potential transaction between PPG and Akzo Nobel would be less than a quarter of this level.

The conclusions of this independent research reinforce statements made by various parties, including Elliott, equity research analysts and PPG following Akzo Nobel's presentation of 19 April. Elliott believes that employees of Akzo Nobel will be better placed in a combined PPG and Akzo Nobel scenario, which would see a larger and stronger company better positioned to grow, gain market share, innovate and compete in the future, compared to a smaller stand-alone Akzo Nobel, with a separated Specialty Chemicals business. Akzo Nobel's stand-alone plan, as outlined by the Boards, assumes significantly greater execution risk and entails a considerably higher degree of uncertainty for all Akzo Nobel stakeholders than does a potential PPG combination scenario. The analysis undertaken by Elliott's consultants illustrates the stakes for employees of Akzo Nobel.

Elliott calls upon Akzo Nobel to clarify the number of employee redundancies required to achieve its stand-alone margin guidance so that all stakeholders can more fully evaluate their plans.

To view the ChemQuest analysis in detail, please view the presentation here: http://www.valuecreationatakzo.com/perspectives/elliotts-presentations/.

About Elliott 

Elliott Management Corporation was founded in 1977 and has one of the longest track records of any private investment fund manager operating today.  Employing a multi-strategy trading approach, the firm manages approximately USD 33 billion in two funds for a range of investors, including pension plans, sovereign wealth funds, endowments, foundations, funds-of-funds, high net worth individuals and families, and employees of the firm.  Elliott Management, which is headquartered in New York, has approximately 400 employees worldwide, with offices in the U.S., London, Hong Kong and Tokyo.  The firm's principal objective is to generate a return which is as high as is consistent with a goal of minimizing losses during adverse financial market periods. 

1. A detailed "outside-in" estimate using publicly available information.