media release

Akzo Nobel Expanding Coatings Activities in the Czech Republic

Akzo Nobel's Coatings business is continuing to build its position in Central Europe having signed an agreement to acquire Balakom a.s., one of the leading paint companies in the Czech Republic.

Arnhem, the Netherlands, April 25, 2006 — Akzo Nobel, the world's biggest coatings company, is continuing to build its position in Central Europe having signed an agreement to acquire Balakom a.s., one of the leading paint companies in the Czech Republic.

Based in Opava in the Czech Republic, the purchase of Balakom—which was established in 1907—will substantially increase Akzo Nobel’s domestic market share and provide a solid base for further expansion.

“Strengthening the presence of our coatings activities in Central Europe is a key element of the company’s global expansion strategy and this deal makes sound business sense on a number of levels,” explained Akzo Nobel CEO Hans Wijers, who is also the Board member responsible for Coatings.

“Balakom is a respected company with a long and proud history in the coatings industry and its sound technological base has resulted in the development of a number of well known brands,” he continued. “There is an obvious strategic fit which will provide the necessary momentum for us to grow our Decorative Coatings business in what is a highly attractive region.”

Added Christian Seidler, Balakom’s General Manager: “We are excited about joining the world’s largest coatings supplier. Balakom has a comprehensive responsible care program and in that respect we will also fit nicely into Akzo Nobel.”

Balakom—which has 183 employees—produces paints, varnishes, enamels and lacquers, as well as powder coatings. Sales, which are mainly in the domestic market, totaled EUR 16 million in 2005.

The transaction—for which regulatory approvals are being sought—represents the latest in a series of deals involving Akzo Nobel Decorative Coatings, with acquisition agreements having also been signed in the Ukraine, China, Switzerland and Germany during recent months. Akzo Nobel has also made an offer to acquire Sico Inc., Canada’s leading coatings company.

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