Apollo Global Management, LLC, an American private equity firm, has reportedly joined forces with PGGM, one of the largest Netherland-based pension funds. The collaboration is aimed at purchasing a part of AkzoNobel, the Amsterdam headquartered bulk & specialty chemicals industry giant.
According to The Financial Times, PGGM, boasting of assets worth EUR 200 billion under management, may be a minority co-investor in the deal, while Apollo may invest a relatively larger amount. The agreement would reportedly help both the co-investors acquire Akzo’s specialty chemicals unit worth EUR 10 billion.
Apollo’s bid for AkzoNobel comes merely a while after the New York equity firm had already collaborated with Lanxess, the Germany bulk & specialty chemicals industry firm. Apollo had apparently signed on this partnership to exhibit its expertise in the chemical sector. Indeed, the private equity firm’s current move of buying out Akzo’s chemical unit indicates the fluctuating nature of the bulk & specialty chemicals industry. In context, experts are of the view that amidst such a ferociously competitive backdrop, it is becoming increasingly difficult for companies to endorse mutually lucrative deals.
For the record, this is not the first time Apollo has harnessed the strategy of joining hands with a regional firm to seek an edge in auction rounds. In 2015, the firm sought a deal with Bpifrance, the country’s state-backed investment fund, during the purchase of Saint Gobain’s acclaimed glass bottle manufacturing arm.
Reportedly, Apollo is not the only equity concern that in under pressure to liaison with industrial companies. Carlyle, the Washington-based multinational private equity also plans to acquire core industrial businesses for cash deployment, as investors have raised their allocation to the asset class.
Currently, Apollo seems to be under immense stress to purchase Akzo, especially after having failed to acquire Unilever’s spread business last year.
For the record, Apollo and PGGM have both refused to give out any public comments with regards to the proposed buyout of Akzo’s specialty chemicals arm.