Business Concentrates START-UPS
PPG makes third and ‘last’ offer to buy AkzoNobel Paint firm’s $28.8 billion offer comes with conditions to smooth the way PPG Industries has made a third offer to acquire fellow paint producer AkzoNobel, this time for $28.8 billion. PPG had already offered to buy the Dutch firm for $26.3 billion, but its advances were firmly rejected. The latest offer represents a premium of
Analysts expect discussions between the two paints firms to ensue. around 50% over AkzoNobel’s share price in March, before PPG’s first bid was made public. AkzoNobel will only say that under Dutch regulations it will carefully review and consider the proposal. PPG’s new offer continues a game of cat and mouse between the two companies. AkzoNobel’s CEO Ton Büchner had refused to talk with PPG’s management team about the two previous offers because he said they undervalued the company. He also said any deal was in danger of being derailed by regulatory bodies and could lead to job cuts. Unlike in its previous two offers, though,
this time PPG says it is prepared to give AkzoNobel a “significant” but as yet undisclosed fee should the two companies strike a deal but competition authorities block it. Additionally, PPG has agreed to protect pensions, jobs, and the Dutch firm’s headquarters. Investors such as the activist shareholder Elliott Management had been pressuring Büchner to talk with PPG even before the latest offer. Analysts think AkzoNobel will now be forced to come to the negotiating table. “PPG has threatened a hostile bid if this does not elicit a negotiation. That will probably not be necessary,” says John Colley, a professor at Warwick Business School. PPG’s new offer comes just days after Büchner detailed plans to divest AkzoNobel’s chemicals business within 12 months, leaving it with only paints and coatings activities. Büchner told AkzoNobel shareholders that the move would create more value than PPG’s offer at the time. PPG counters that its latest offer is “vastly superior” to AkzoNobel’s plan. It predicts that combining the two companies will create $750 million per year in synergies. Even if PPG doesn’t succeed in acquiring AkzoNobel with its latest offer, it may mount a subsequent challenge. The U.S. firm may opt to relaunch its offer in 2018 or 2019 once AkzoNobel’s chemicals divestment is out of the way, predicts the investment banking firm Jefferies.—ALEX SCOTT
BY THE NUMBERS
$175,000 Prize money available for new preservatives with improved environmental health and safety profiles for use in personal care and household products. The contest, operated by InnoCentive and the Green Chemistry & Commerce Council, is sponsored by Procter & Gamble, Johnson & Johnson, and other firms. They are seeking broad-spectrum or single-action agents that control Gram-positive bacteria, Gram-negative bacteria, yeast, and mold or that act as preservative boosters. View contest details online at goo.gl/yl59mT. 14
C&EN | CEN.ACS.ORG | MAY 1, 2017
Forge scores $15 million in venture funding Forge Therapeutics has closed its first large round of financing, securing $15 million from MagnaSci Ventures, Evotec, and other investors. The tiny biotech firm, founded on technology developed in the labs of University of California, San Diego, chemist Seth Cohen, will use the proceeds to push forward its Gram-negative antibiotics program. Forge was the subject of a C&EN story in early 2016 about what it’s like to be a young biotech firm looking for financing and partnerships during the annual JPMorgan Healthcare meeting. At the time, the company had a goal of raising its first round of funding to support development of metalloprotein inhibitors— in particular, compounds that block LpxC, a zinc-containing enzyme found in bacteria. Forge’s goal was to raise the funds by the end of 2016. CEO Zachary Zimmerman attributes the delay to two developments. The first was the creation in July 2016 of the Combating Antibiotic Resistant Bacteria Accelerator (CARB-X), a public-private partnership that is providing grants to companies developing novel antibacterials. Forge recently received the largest of CARB-X’s first awards—$4.8 million over 15 months and potentially $4.0 million more as its project progresses. And in December, Forge formed an alliance with Evotec, a contract research firm, to move its LpxC inhibitors through lead optimization. With the cash, Forge plans to “graduate” from its incubator space at Johnson & Johnson’s JLABS in San Diego. The firm will also hire a few key scientists to complement the dozen Evotec researchers working on its antibiotic project. It hopes to start human tests on an LpxC inhibitor by 2020.—LISA JARVIS
CREDIT: AKZONOBEL
BUSINESS
