Following the sale of its Specialty Chemicals business on Oct. 1, AkzoNobel announced that shareholders will receive €5.5 billion (approximately $6.3 billion US). This is in addition to the €1 billion (approximately $1.2 billion US) in advance proceeds distributed by a special cash dividend paid on Dec. 7, 2017.
In all, a total of €6.5 billion ($7.5 billion US) will have been distributed to shareholders, with AkzoNobel delivering on its commitment to return the vast majority of €7.5 billion net proceeds, from the separation of the Specialty Chemicals business.
The additional €5.5 billion in proceeds will be distributed using a capital repayment and share consolidation of €2 billion, special cash dividend of €1 billion, and share buyback of €2.5 billion.
Commenting on the news, Thierry Vanlancker, CEO of AkzoNobel, said, “This is a clear sign we are delivering on our commitments and focused on creating value for all our stakeholders as a paints and coatings company.
“We consulted many shareholders and evaluated various options to determine an optimal and timely way to return the vast majority of net proceeds following the sale of the Specialty Chemicals business.”
The capital repayment and share consolidation will be subject to shareholder approval at an Extraordinary General Meeting (EGM), to be held on Nov. 13. The special cash dividend will be paid shortly after the capital repayment and share consolidation has been completed. The share buyback will commence following payment of the special cash dividend and likely be completed during the middle of 2020. Shares will be canceled following repurchase.
Remaining proceeds will be used for the repayment of debt, costs associated with the transformation and bolt-on acquisitions. The ordinary dividend relevant for AkzoNobel as a focused paints and coatings company is €1.65 per share, as announced on April 19, 2017, and the dividend policy remains ‘stable to rising’. AkzoNobel says it is committed to retaining a strong investment grade credit rating.