Axalta is a chip in DowDuPont's paintwork

St Dupont SA

02/11/2017 13:40

(The author is a Reuters Breakingviews columnist.  The opinions 
expressed are his own.) 
    By John Foley 
    LONDON, Nov 2 (Reuters Breakingviews) - Activist Nelson 
Peltz once pilloried chemicals giant DuPont for selling its 
coatings business to private equity. He was right. Axalta is now 
weighing a merger with Akzo Nobel. With a bit more love, it 
might have given investors in what's now DowDuPont a 29 percent 
annual return. 
     
    Full view will be published shortly. 
    On Twitter https://twitter.com/johnsfoley 
     
    CONTEXT NEWS 
    - Akzo Nobel, the Dutch maker of Dulux paint, confirmed on 
Oct. 30 that it was in "constructive discussions" about a 
"merger of equals" with U.S. rival Axalta Coating Systems. 
    - Axalta was originally part of DuPont, the chemicals group 
that merged with Dow in September. It was sold to private equity 
investor Carlyle in February 2013 for $4.9 billion, and 
subsequently listed in New York in November 2014. 
    - DowDuPont reported its first post-merger quarterly 
earnings on Nov. 2, and announced a $4 billion share buyback 
programme. Adjusted earnings per share of $0.55 compared with 
analyst forecasts of $0.42, according to Eikon. 
    - Activist investor Trian Fund Management accused DuPont of 
transferring wealth to Carlyle by not spinning Axalta off to 
shareholders, in an open letter in September 2014. 
    - For previous columns by the author, Reuters customers can 
click on  FOLEY/  
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DowDuPont statement    http://www.dow-dupont.com/news-and-media/press-release-details/2017/DowDuPont-Reports-Third-Quarter-2017-Results/default.aspx 
DowDuPont set to beat quarterly estimates as new company    
 urn:newsml:reuters.com:*:nL4N1N143D 
New Akzo Nobel boss pursues $30 billion deal with Axalta    
 urn:newsml:reuters.com:*:nL8N1N50Q0 
BREAKINGVIEWS-Axalta deal complicates Akzo's juggling act    
 urn:newsml:reuters.com:*:nL4N1N53LH 
BREAKINGVIEWS-Clariant-Huntsman gives way to post-activism chill 
    urn:newsml:reuters.com:*:nL8N1N22IP 
BREAKINGVIEWS-Akzo investors get whiff of reality. It smells bad 
    urn:newsml:reuters.com:*:nL8N1LP1G6 
BREAKINGVIEWS-DowDuPont gives blueprint for activist compromise  
   urn:newsml:reuters.com:*:nL2N1LT0S7 
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 (Editing by Richard Beales and Liam Proud) 
 ((john.foley@thomsonreuters.com;)(Reuters Messaging: 
john.foley.thomsonreuters.com@reuters.net)) 
 
Keywords: AXALTA M&A/BREAKINGVIEWS