The chief executive of Dutch paint maker Akzo Nobel NV said customers are skeptical of a tie-up with a chief rival that might leave less choice for key paints and coatings.
"I have spoken to customers who have expressed concerns," Akzo Chief Executive Ton Büchner said in an interview Monday after Akzo rejected a $27 billion takeover bid from PPG Industries Inc. "There is certainly areas where the choice will be reduced, and that's of course what the regulatory bodies will study very carefully."
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Mr. Büchner said regulators may require both companies to shed segments before such an acquisition could create the world's largest paints and coatings maker. Akzo's rejection of PPG's latest offer sets up a potential hostile bid by the Pittsburgh company.
Mr. Büchner said employees in Akzo's specialty chemicals business have expressed "anxiety and insecurity" despite PPG's assertions that it would guarantee their jobs. PPG has also said local suppliers in the Netherlands and U.K. would still be allowed the opportunity to keep up their sales to the combined company.
But Mr. Büchner questioned those commitments. He said they would be enforceable in U.K. courts but not in the Netherlands.
"There are therefore many customary ways in the Netherlands to make sure that some of these non-financial stakeholder matters and the guarantees that people give are actually also secured," he said. "But none of these very customary parts have been proposed."
PPG representatives didn't immediately respond to a request for comment. PPG has said it wouldn't raise its bid, but signaled that it is preparing a public tender for Akzo. The company said earlier Monday it would review Akzo's response.
Mr. Büchner declined to speculate about PPG's next move or how Akzo might respond.
--Ben Dummett contributed to this article.
Write to Andrew Tangel at Andrew.Tangel@wsj.com and Christopher Alessi at email@example.com
(END) Dow Jones Newswires
May 08, 2017 13:38 ET (17:38 GMT)