Tikkurila Oyj : PPG Industries, Inc. to increase the offer price to EUR 34.00 per share and amend certain other terms of the offer; PPG and Tikkurila Oyj have agreed on an amendment to the combination agreement

PPG Industries, Inc. to increase the offer price to EUR 34.00 per share and amend certain other terms of the offer; PPG and Tikkurila Oyj have agreed on an amendment to the combination agreement

TIKKURILA OYJ
Tender Offer
February 4, 2021 at 9.35 a.m. EET

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, HONG KONG, JAPAN, NEW ZEALAND OR SOUTH AFRICA OR IN ANY OTHER JURISDICTION IN WHICH THE TENDER OFFER WOULD BE PROHIBITED BY APPLICABLE LAW.

Highlights of the Improved Tender Offer by PPG Industries, Inc.

• PPG Industries Inc. to increase the Offer Price to EUR 34.00 per share (previously EUR 27.75 per share, initially EUR 25.00 per share)
• The Offer Price in the Improved Tender Offer represents a premium of approximately 8.8 per cent compared to the Potential Competing Offer from AkzoNobel.
• To increase deal certainty, the Offeror has changed the condition for completion of the Improved Tender Offer concerning the minimum acceptance level by lowering the relevant threshold from more than 90 per cent to more than 66.7 per cent.
• In addition, the Offeror has provided additional undertakings for the obtaining of the regulatory approvals in order to ensure completion of the Improved Tender Offer.
• Certain major shareholders of Tikkurila, Varma Mutual Pension Insurance Company, Mandatum Life Insurance Company Limited and Kaleva Mutual Insurance Company, representing in the aggregate approximately 9.32 per cent of the shares in the Company, have unconditionally agreed to sell their Shares to the Offeror. In addition, Oras Invest Oy has agreed to an unconditional irrevocable undertaking to accept the Improved Tender Offer and has also unconditionally agreed to sell its Shares to the Offeror upon the receipt by the Offeror of the necessary regulatory approvals. In total, the Shares subject to sale to the Offeror represent in the aggregate approximately 29.34 per cent of the shares in the Company.
• The Offeror expects that the Improved Tender Offer can close as early as March in accordance with the original preliminary time schedule set forth in terms and conditions of the Tender Offer or early in the second quarter of 2021. Regulatory approvals are progressing in line with this schedule.
• The members of the Board of Directors who participated in the decision-making have unanimously decided to recommend that the shareholders of the Company accept the Improved Tender Offer.

PPG Industries, Inc. ("PPG" or the "Offeror"), a corporation incorporated under the laws of Pennsylvania, and Tikkurila Oyj ("Tikkurila" or the "Company") announced on December 18, 2020 that they entered into a combination agreement (the "Combination Agreement"), pursuant to which the Offeror has made a voluntary recommended public cash tender offer for all the issued and outstanding shares in the Company (the "Shares") that are not held by the Company or any of its subsidiaries. The initial cash consideration offered for each Share in the tender offer was increased by PPG for the first time in response to a proposal regarding a competing offer received by the Company from Hempel A/S ("Hempel"), to EUR 27.75 (prior to the first amendment: EUR 25.00), as announced on January 5, 2021. The tender offer commenced on January 15, 2021 and is currently ongoing.

On January 28, 2021, the Company received a proposal regarding a potential competing offer (the "Potential Competing Offer") by Akzo Nobel N.V. ("AkzoNobel"). Following a careful review of the Potential Competing Offer by the Board of Directors of Tikkurila (the "Board of Directors"), the Offeror and the Company have today entered into an amendment to the Combination Agreement, according to which the Offeror has, among other things, agreed to increase the cash consideration offered for each Share in the tender offer to EUR 34.00 (the "Offer Price") (prior to the second amendment: EUR 27.75), subject to possible adjustments as described below (the "Improved Tender Offer"). The Offer Price in the Improved Tender Offer represents a premium of 8.8 per cent compared to the Potential Competing Offer from AkzoNobel. The Improved Tender Offer values the Company's total equity at approximately EUR 1.5 billion.

The Offer Price in the Improved Tender Offer represents a premium of approximately 126.1 per cent compared to the closing price of the Shares on Nasdaq Helsinki Ltd ("Nasdaq Helsinki") on December 17, 2020, the last trading day prior to the announcement of the tender offer; approximately 131.7 per cent compared to the volume-weighted average trading price of the Shares on Nasdaq Helsinki during the three-month period prior to and up to the date of the announcement of the tender offer; and approximately 141.7 per cent compared to the volume-weighted average trading price of the Shares on Nasdaq Helsinki during the 12-month period prior to and up to the date of the announcement of the tender offer.

The Company was in discussions with AkzoNobel with respect to a potential acquisition of the Company prior to the Company's decision to enter into the Combination Agreement with PPG in December 2020. Following the announcement of the Combination Agreement with PPG, AkzoNobel announced the Potential Competing Offer on January 18, 2021, and the Board of Directors provided AkzoNobel a corresponding possibility to make a binding offer for the shares of Tikkurila and provided AkzoNobel a corresponding opportunity to conduct due diligence and access to Tikkurila's management. Following such due diligence review, on January 28, 2021, AkzoNobel delivered to the Board of Directors a proposal for an offer to acquire all issued and outstanding shares of Tikkurila at an offer price of EUR 31.25 per share. AkzoNobel's Potential Competing Offer was conditioned on the Board of Directors recommending AkzoNobel's Potential Competing Offer and AkzoNobel obtaining an irrevocable undertaking from Oras Invest Oy to accept AkzoNobel's Potential Competing Offer. Additionally, the completion of the Potential Competing Offer was subject to customary conditions substantially similar to those included in the tender offer document published by PPG, dated January 14, 2021, including among others exceeding a 90 per cent acceptance level and obtaining required regulatory approvals. AkzoNobel's Potential Competing Offer also contemplated a sale of certain AkzoNobel businesses to Hempel and a potential divestment of certain of the Company's businesses as part of its transaction, leading to a potentially more complex process.

Following receipt of AkzoNobel's Potential Competing Offer, the Board of Directors has carefully assessed the Potential Competing Offer and, in accordance with the Board of Directors' obligations under applicable laws and regulations as well as the Combination Agreement, negotiated with PPG with respect to potential amendments to the Combination Agreement and tender offer. Under the Combination Agreement, PPG had to be given at least five (5) business days' period allowing PPG to negotiate for potential amendments. The Board of Directors, in consultation with its financial and legal advisors, has carefully compared the Potential Competing Offer with the Improved Tender Offer proposed by PPG. The Board of Directors has also considered the need for stable operating conditions for the Company's business and personnel ahead of an important sales season in order to minimize any adverse impacts caused by a lengthy transaction process.

In connection with increasing the Offer Price, PPG proposed to change the condition for completion of the Improved Tender Offer concerning the minimum acceptance level by lowering the relevant threshold from more than 90 per cent to more than 66.7 per cent , in order to provide additional deal certainty to the Company and its shareholders. In addition, PPG agreed to provide additional undertakings for the obtaining of the regulatory approvals in order to ensure completion of the Improved Tender Offer. PPG has already significantly progressed the regulatory review of its transaction, including formally filing the transaction with the competition authorities of the European Commission this week. In addition, in connection with the significant increase in the Offer Price and enhancements to deal certainty, and to reflect the costs incurred, PPG requested that Tikkurila increases the termination fee payable to PPG in the event the Combination Agreement is terminated due to certain reasons specified in the Combination Agreement, such as the Board of Directors withdrawing, modifying or changing its recommendation regarding PPG's Improved Tender Offer.

Following extensive review and discussions and after having regarded factors such as deal certainty for the Company and its shareholders, timeline to closing, including the fact that the regulatory process for PPG's Improved Tender Offer is well advanced, and potential disruption for the Company and its employees and other stakeholders, and after consultation with its financial and legal advisors, the Board of Directors has assessed PPG's Improved Tender Offer in comparison with AkzoNobel's Potential Competing Offer. The Board of Directors has concluded that following the significant increase in the Offer Price by PPG, together with the other amended terms and conditions of the Improved Tender Offer and deal certainty aspects related to the timing in obtaining required approvals from the regulatory authorities, the Improved Tender Offer by PPG is more beneficial for the Company, its shareholders and other stakeholders as compared to the Potential Competing Offer received from AkzoNobel. Therefore, the members of the Board of Directors who participated in the decision-making have unanimously decided to recommend that the shareholders of the Company accept the Improved Tender Offer. The Board of Directors will update its statement regarding the tender offer that was issued and announced on January 13, 2021.

The Company has been informed that, in connection with the significantly increased Offer Price and other amendments to the terms and conditions of PPG's Improved Tender Offer, certain major shareholders of Tikkurila, i.e. Varma Mutual Pension Insurance Company, Mandatum Life Insurance Company Limited and Kaleva Mutual Insurance Company, representing in the aggregate approximately 9.32 per cent of the shares in the Company, have unconditionally agreed to sell their Shares to the Offeror and Oras Invest Oy has given an unconditional irrevocable undertaking to accept the Improved Tender Offer. In addition, Oras Invest Oy has unconditionally agreed to sell and PPG has agreed to purchase the Shares owned by Oras Invest Oy following receipt of the necessary regulatory approvals. In total, upon completion of the sales of Shares, PPG will own in the aggregate approximately 29.34 per cent of the Shares in the Company.

The Offer Price has been determined based on 44,105,881 Shares. Should the Company change the number of Shares as a result of a new issue, reclassification, stock split (including a reverse split) or any other similar transaction with a dilutive effect, or should the Company distribute a dividend or otherwise distribute funds or any other assets to its shareholders, or if a record date with respect to any of the foregoing shall occur prior to the consummation of the Improved Tender Offer, the Offer Price shall be adjusted accordingly on a euro-for-euro basis.

The Offeror published the tender offer document with detailed information on the tender offer on January 14, 2021. The offer period commenced on January 15, 2021, and will expire on March 15, 2021, unless the Offeror extends the offer period in order to satisfy the conditions to completion of the Improved Tender Offer, including, among others, receipt of the relevant regulatory approvals. The Offeror will supplement the tender offer document with the increased Offer Price and the other amended terms and conditions and will publish a supplement to the tender offer document once it has been approved by the Finnish Financial Supervisory Authority. The Improved Tender Offer is currently expected to be completed in March or at the beginning of the second quarter of 2021. The same increased Offer Price is offered for all shares in the Improved Tender Offer, also for those who have already accepted the tender offer by PPG. 

Advisers

Tikkurila has appointed Skandinaviska Enskilda Banken AB (publ), Helsinki branch as financial adviser and Hannes Snellman Attorneys Ltd as legal adviser in connection with the tender offer. The Offeror has appointed PJT Partners LP as financial adviser and Wachtell, Lipton, Rosen & Katz and DLA Piper Finland Attorneys Ltd. as legal advisers in connection with the tender offer. The Offeror has appointed Danske Bank A/S, Finland Branch as the arranger and D.F. King & Co, Inc. and D.F. King Ltd as the information agent.

For more information, please contact:

Sanna Lehti, General Counsel
tel. [phone]
[e-mail]

DISTRIBUTION

Nasdaq Helsinki Ltd
Main news media

IMPORTANT INFORMATION

THIS RELEASE MAY NOT BE RELEASED OR OTHERWISE DISTRIBUTED, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO, AUSTRALIA, CANADA, HONG KONG, JAPAN, NEW ZEALAND OR SOUTH AFRICA OR IN ANY OTHER JURISDICTION IN WHICH THE TENDER OFFER WOULD BE PROHIBITED BY APPLICABLE LAW.

THIS RELEASE IS NOT A TENDER OFFER DOCUMENT AND AS SUCH DOES NOT CONSTITUTE AN OFFER OR INVITATION TO MAKE A SALES OFFER. IN PARTICULAR, THIS RELEASE IS NOT AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES DESCRIBED HEREIN, AND IS NOT AN EXTENSION OF THE TENDER OFFER, IN, AUSTRALIA, CANADA, HONG KONG, JAPAN, NEW ZEALAND OR SOUTH AFRICA. INVESTORS SHALL ACCEPT THE TENDER OFFER FOR THE SHARES ONLY ON THE BASIS OF THE INFORMATION PROVIDED IN A TENDER OFFER DOCUMENT. THE TENDER OFFER IS NOT BEING MADE, AND THE SHARES WILL NOT BE ACCEPTED FOR PURCHASE FROM OR ON BEHALF OF PERSONS, DIRECTLY OR INDIRECTLY IN ANY JURISDICTION WHERE EITHER AN OFFER OR ACCEPTANCE THEREOF IS PROHIBITED BY APPLICABLE LAW OR WHERE ANY TENDER OFFER DOCUMENT OR REGISTRATION OR OTHER REQUIREMENTS WOULD APPLY IN ADDITION TO THOSE UNDERTAKEN IN FINLAND.

THE TENDER OFFER IS NOT BEING MADE DIRECTLY OR INDIRECTLY IN ANY JURISDICTION WHERE PROHIBITED BY APPLICABLE LAW AND, WHEN PUBLISHED, THE TENDER OFFER DOCUMENT AND RELATED ACCEPTANCE FORMS WILL NOT AND MAY NOT BE DISTRIBUTED, FORWARDED OR TRANSMITTED INTO OR FROM ANY JURISDICTION WHERE PROHIBITED BY APPLICABLE LAWS OR REGULATIONS. IN PARTICULAR, THE TENDER OFFER IS NOT BEING MADE, DIRECTLY OR INDIRECTLY, IN OR INTO, BY USE OF THE POSTAL SERVICE OF, OR BY ANY MEANS OR INSTRUMENTALITY (INCLUDING, WITHOUT LIMITATION, E-MAIL, FACSIMILE TRANSMISSION, TELEX, TELEPHONE OR ELECTRONIC TRANSMISSION BY WAY OF THE INTERNET OR OTHERWISE) OF INTERSTATE OR FOREIGN COMMERCE OF, OR THROUGH ANY FACILITIES OF A NATIONAL SECURITIES EXCHANGE OF, AUSTRALIA, CANADA, HONG KONG, JAPAN, NEW ZEALAND OR SOUTH AFRICA. THE TENDER OFFER CANNOT BE ACCEPTED, DIRECTLY OR INDIRECTLY, BY ANY SUCH USE, MEANS OR INSTRUMENTALITY OR FROM WITHIN, AUSTRALIA, CANADA, HONG KONG, JAPAN, NEW ZEALAND OR SOUTH AFRICA AND ANY PURPORTED ACCEPTANCE OF THE TENDER OFFER RESULTING DIRECTLY OR INDIRECTLY FROM A VIOLATION OF THESE RESTRICTIONS WILL BE INVALID.

THIS STOCK EXCHANGE RELEASE HAS BEEN PREPARED IN COMPLIANCE WITH FINNISH LAW, THE RULES OF NASDAQ HELSINKI AND THE HELSINKI TAKEOVER CODE AND THE INFORMATION DISCLOSED MAY NOT BE THE SAME AS THAT WHICH WOULD HAVE BEEN DISCLOSED IF THIS ANNOUNCEMENT HAD BEEN PREPARED IN ACCORDANCE WITH THE LAWS OF JURISDICTIONS OUTSIDE OF FINLAND.

Information for shareholders of Tikkurila in the United States

Shareholders of Tikkurila in the United States are advised that the Shares are not listed on a U.S. securities exchange and that Tikkurila is not subject to the periodic reporting requirements of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act"), and is not required to, and does not, file any reports with the U.S. Securities and Exchange Commission (the "SEC") thereunder.

The Tender Offer is being made for the issued and outstanding shares of Tikkurila, which is domiciled in Finland, and is subject to Finnish disclosure and procedural requirements. The Tender Offer is being made in the United States pursuant to Section 14(e) and Regulation 14E under the Exchange Act, subject to exemptions provided by Rule 14d-1(d) under the Exchange Act for a "Tier II" tender offer, and otherwise in accordance with the disclosure and procedural requirements of Finnish law, including with respect to the Tender Offer timetable, settlement procedures, withdrawal, waiver of conditions and timing of payments, which are different from those of the United States. In particular, the financial information, if any, included in this announcement has been prepared in accordance with applicable accounting standards in Finland, which may not be comparable to the financial statements or financial information of U.S. companies. The Tender Offer is being made to the Company's shareholders resident in the United States on the same terms and conditions as those that are being made to all other shareholders of the Company to whom an offer is being made.

To the extent permissible under applicable law or regulations, the Offeror and its affiliates or its brokers and its brokers' affiliates (acting as agents for the Offeror or its affiliates, as applicable) may from time to time after the date of the stock exchange release regarding the Tender Offer on December 18, 2020 and during the pendency of the Tender Offer, and other than pursuant to the Tender Offer, directly or indirectly, purchase or arrange to purchase the Shares or any securities that are convertible into, exchangeable for or exercisable for the Shares. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. To the extent information about such purchases or arrangements to purchase is made public in Finland, such information will be disclosed by means of a press release or other means reasonably calculated to inform U.S. shareholders of such information. No purchases will be made outside the Tender Offer in the United States by or on behalf of the Offeror. In addition, the financial advisers to the Offeror may also engage in ordinary course trading activities in securities of the Company, which may include purchases or arrangements to purchase such securities. To the extent required in Finland, any information about such purchases will be made public in Finland in the manner required by Finnish law.

Neither the SEC nor any U.S. state securities commission has approved or disapproved the Tender Offer, passed upon the merits or fairness of the Tender Offer, or passed any comment upon the adequacy, accuracy or completeness of the disclosure in this stock exchange release. Any representation to the contrary is a criminal offence in the United States.

The receipt of cash pursuant to the Tender Offer by a U.S. holder of Shares may be a taxable transaction for U.S. federal income tax purposes and under applicable U.S. state and local, as well as foreign and other, tax laws. Each holder of Shares is urged to consult its independent professional adviser immediately regarding the tax consequences of accepting the Tender Offer.

It may be difficult for the Company's shareholders to enforce their rights and any claims they may have arising under the U.S. federal securities laws, since the Company is located in a non-U.S. jurisdiction, and some or all of its officers and directors may be residents of non-U.S. jurisdictions. The Company's shareholders may not be able to sue the Company or its officers or directors in a non-U.S. court for violations of the U.S. federal securities laws. It may be difficult to compel the Company and its affiliates to subject themselves to a U.S. court's judgment.

Forward-looking statements

This stock exchange release contains statements that, to the extent they are not historical facts, constitute "forward-looking statements". Forward-looking statements include statements concerning plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, competitive strengths and weaknesses, plans or goals relating to financial position, future operations and development, business strategy and the trends in the industries and the political and legal environment and other information that is not historical information. In some instances, they can be identified by the use of forward-looking terminology, including the terms believes", "intends", "may", "will" or "should" or, in each case, their negative or variations on comparable terminology. By their very nature, forward-looking statements involve inherent risks, uncertainties and assumptions, both general and specific, and risks exist that the predictions, forecasts, projections and other forward-looking statements will not be achieved. Given these risks, uncertainties and assumptions, investors are cautioned not to place undue reliance on such forward-looking statements. Any forward-looking statements contained herein speak only as at the date of this stock exchange release.

Disclaimers

PJT Partners LP is acting exclusively for the Offeror and no one else in connection with the Tender Offer or the matters referred to in this document, will not regard any other person (whether or not a recipient of this document) as its client in relation to the Tender Offer and will not be responsible to anyone other than the Offeror for providing the protections afforded to its clients or for providing advice in relation to the Tender Offer or any other transaction or arrangement referred to in this document.

Skandinaviska Enskilda Banken AB (publ), Helsinki branch, is acting exclusively as the financial adviser for the Company and no one else in connection with the Tender Offer or the matters referred to in this document, will not regard any other person (whether or not a recipient of this document) than the Company as its client in relation to the Tender Offer and will not be responsible to anyone other than the Company for providing the protections afforded to its clients nor for providing advice in relation to the Tender Offer or any other transaction or arrangement referred to in this document.

Danske Bank A/S, Finland Branch, acting exclusively as an arranger in relation to the Tender Offer, will not regard any other person than the Offeror as its client in relation to the Tender Offer and will not be responsible to anyone other than the Offeror for providing the protections afforded to its clients nor for providing advice in relation to the Tender Offer or any other transaction or arrangement referred to in this document.

Sustainable Nordicness
Tikkurila is a leading Nordic paint company with expertise that spans decades. We develop premium products and services that provide our customers with quality that will stand the test of time and weather. We operate in seven countries and our 2,600 dedicated professionals share the joy of building a vivid future through surfaces that make a difference. In 2019, our revenue totaled EUR 564 million. The company is listed on Nasdaq Helsinki. Nordic quality from start to finish since 1862.

www.tikkurilagroup.com

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