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PPG Industries Won’t Attempt to Acquire Akzo Nobel

Peter Neil - Author
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Jun. 5 2017, Updated 12:05 p.m. ET

PPG Industries won’t acquire Akzo Nobel

On June 1, 2017, PPG Industries (PPG) announced that it won’t make another attempt to acquire Akzo Nobel. The release came after PPG made three unsuccessful attempts to acquire Akzo Nobel. PPG made upward revisions in its previous attempt but Akzo Nobel wasn’t interested in the offer. Akzo Nobel thinks that it can create more value for its investors by planning a spin-off of its specialty chemicals business.

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Michael McGarry, PPG’s chairman and CEO, said, “We were hopeful throughout this process that AkzoNobel’s Boards would see the merits of our compelling proposal to combine our two great companies and create significant shareholder value and a more sustainable business for the future. We strongly believe a combined company would create more opportunities and provide more benefits for our collective customers, employees, shareholders and society in general.”

PPG’s stock performance

As of June 2, 2017, PPG Industries closed at $110.42 and rose 3.0% for the week. It underperformed its peers Sherwin-Williams (SHW), RPM International (RPM), and Axalta (AXTA). They returned 3.1%, 3.7%, and 4.0%, respectively. PPG’s gain helped the stock widen its 100-day moving average gap. It traded 6.1% above the 100-day moving average price of $104.10. Analysts expect PPG’s 12-month target price to be $114.45, which implies a potential return of 3.4% compared to the closing price on June 2, 2017. PPG’s 52-week low is $89.64 and its 52-week high is 113.49.

PPG’s 14-day RSI (relative strength index) of 65 indicates that the stock isn’t overbought or oversold. An RSI of 70 indicates that the stock is overbought, while an RSI of 30 indicates that the stock is oversold.

Investors can invest PPG Industries indirectly by investing in the Materials Select Sector SPDR ETF (XLB). XLB has invested 4.9% of its holdings in PPG Industries. XLB rose 1.7% for the week ending June 2, 2017.

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