Houston, Amsterdam

PPG Industries Inc dropped its pursuit of paintmaking rival Akzo Nobel NV after the Dutch maker of chemicals and coatings refused to discuss last-ditch sweeteners to a $29.5 billion (Dh108.26 billion) offer.

PPG made a final effort in recent days to bring Akzo Nobel to the negotiating table, offering in a letter to nominally increase the price and pay a 600-million-euro (Dh2.46 billion, $674 million) break-up fee if regulators rejected the deal, the Pittsburgh-based company said in a statement Thursday. PPG said it sent the letter Monday to Chairman Antony Burgmans because he had declined an emailed request for a 5-minute phone call.

“Akzo Nobel’s boards have consistently refused to engage and did not respond to our call or letter,” PPG Chief Executive Officer Michael McGarry said in the statement. “As a result, we believe it is in the best interests of PPG and its shareholders to withdraw our proposal to Akzo Nobel at this time.”

Akzo Nobel said in a statement it would pursue a strategy of “accelerating sustainable growth and profitability and creating two focused, high-performing businesses.” As an alternative to a takeover, the Amsterdam-based company has proposed to hive off its chemicals business.

PPG’s decision capped a frustrating three-month courtship. Akzo Nobel rejected the US company’s third takeover bid May 8, defying pressure from shareholders such as Elliott Management Corp. to negotiate. McGarry flew to Rotterdam last month in an attempt to get talks under way. But Akzo Nobel CEO Ton Buechner and Burgmans were unwilling to negotiate during a 90-minute airport meeting.

Ticking fee

“The deal collapsed because Akzo Nobel just did not want it, and as long as the current management board and supervisory board are there, I don’t see that changing,” ABN Amro Bank analyst Mutlu Gundogan said by phone. “It’s not a mega-surprise that PPG is withdrawing.”

In addition to the possibility of raising its offer, PPG said Thursday it would consider paying Akzo Nobel shareholders a “ticking fee” of 10 cents a share for every month of delay in closing a deal past a 15-month target. The US company said the offer was an effort to dispel worries expressed by Burgmans about any agreement running afoul of regulators. PPG also offered as much as 50 million euros towards retaining top management.