Akzo Nobel NV, Europe’s largest coatings company, rejected an unsolicited 20.9 billion-euro ($22.1 billion) takeover bid from rival PPG Industries Inc. (NYSE: PPG) and said it may divest its specialty chemicals business to boost the stock price.

PPG’s bid, worth 83 euros a share at the end of February, substantially undervalued the company, Amsterdam-based Akzo said in a statement, confirming a Bloomberg News report that the U.S. company was exploring a deal. The offer is 29 percent above Akzo’s closing level on March 8. The shares rose the most in more than eight years, although they remained below the offer price.

PPG will carefully evaluate its position following the rejection of what it called an “attractive and comprehensive proposal,” the Pittsburgh-based company said in its own statement. PPG won Mergers & Acquisitions’ 2014 Mid-Market Award for Strategic Buyer of the Year.

The specialty chemicals business could fetch about 10 billion euros in a sale, and probably will attract private equity firms such as the Carlyle Group LP (Nasdaq: CG) and CVC Capital Partners, as well as competitors including Evonik Industries AG and BASF SE, people familiar with the matter said. Akzo will consider various “alternative ownership structures” for the unit, including a spinoff, said the Dutch company, which traces it roots partly to a Swedish chemical maker started by industrialist Alfred Nobel, the man behind the annual prizes.

Spurred on by PPG’s approach, chief executive officer Ton Buechner is taking head-on the longstanding question whether Akzo would fare better as a focused coatings company, without the distraction of making chemicals ranging from commodities including chlorine to cosmetic ingredients. The specialty chemicals business had sales of 4.8 billion euros last year, accounting for 34 percent of revenue.

“Akzo Nobel has enjoyed a record performance in recent years in terms of profitability and has made significant strategic progress, allowing us to take this decision,” Buechner said in the statement.

PPG’s offer values the company at 10.4 times earnings before interest, tax, depreciation and amortization, below an average of 12.5 for comparable deals, according to data compiled by Bloomberg. In confirming its bid, PPG said the combination would create a stronger competitor offering more products.

With national elections in the Netherlands next week, the offer adds to concern among Dutch politicians that the nation’s companies are vulnerable to hostile takeovers. Unilever, the Anglo-Dutch consumer products company, last month spurned an unsolicited, $143 billion approach from Kraft Heinz Co. PPG’s offer isn’t in the interest of the Netherlands, Dutch Economy Minister Henk Kamp said.

The Netherlands should better guarantee the country’s strategic economic interests, Finance Minister Jeroen Dijsselbloem was cited as saying by Het Financieele Dagblad on Tuesday. He said 11 of 25 members of the benchmark stock index are insufficiently protected against hostile foreign takeovers.

A friendly deal may be PPG’s best bet as Akzo has in place a Dutch stichting, or foundation, which owns priority shares and can be used as a safeguard against a hostile takeover.

PPG’s proposal carries “serious risks and uncertainties,” Buechner said. One of the CEO’s first major strategic decisions upon taking the helm in 2012 was to execute on the sale of Akzo Nobel’s U.S. decorative paints business to PPG for about $1 billion. Now the U.S. company is returning with an offer for the rest. PPG offered 54 euros in cash and 0.3 of its shares for each Akzo share, the statement said.

Akzo, which owns paint and coatings brands including Dulux and Hammerite, said both the management and supervisory boards, along with financial and legal advisers, reviewed the offer before coming to the conclusion that it fell short. The combined company also would have too much debt, Akzo said. The company is working with HSBC Holdings Plc and Lazard Ltd. on strategic options after PPG’s approach, the people said.

While Buechner said he’s “fully committed” to rejecting PPG’s approach as it stands, he declined to be drawn on whether the door is open to discussions with its suitor should it return with a better offer. Whether there are attractive parts of PPG to combine with “is not a topic for today,” he said on a call with reporters. “Any future proposition is pure speculation.”

Akzo said it didn’t initiate, nor encourage, or entertain any conversations with PPG. The would-be buyer, which has 156 factories worldwide supplying paints, specialty materials and fiber glass, is the world’s biggest producer of coatings for autos and aerospace and No. 2 in architectural and packaging markets, according to a company presentation.

Many PPG investors see the company’s relatively low leverage as an opportunity to make acquisitions, Mike Harrison, a Chicago-based analyst at Seaport Global Holdings LLC, wrote in a note to clients. PPG’s net debt is roughly equal to its earnings before interest, taxes, depreciation and amortization, according to data compiled by Bloomberg. A cash purchase of Akzo would boost net debt to about 4.3 times Ebitda, excluding any cost savings, Harrison said in the note. In 2016, PPG bought coatings company MetoKote

Price wasn’t the only issue with PPG’s approach, as a combination would threaten research and development, thousands of jobs, as well as customer relationships, Buechner said. In any case, the expected synergies from a combination would be compromised by antitrust demands, he added.

The combination would attract intense antitrust scrutiny in Europe and the U.S. given PPG’s and Akzo’s leading market shares in certain coating segments. Akzo has the No. 1 market position in general industrial coatings and protective and marine coatings, while PPG has the No. 2 position, according to SunTrust analysts James Sheehan and Matthew Stevenson.

“We believe regional concentration issues in Europe in those markets could be problematic for getting a tie-up approved quickly,” they said.

Both Akzo and PPG have stayed on the sidelines of recent deal making in the paint and chemicals industries. Sherwin-Williams Co., the No. 3 company in the industry, has agreed to buy Valspar Corp. for $9.3 billion. The U.S. Federal Trade Commission is reviewing that takeover.

After years of cost reductions and improving margins to industry standards, there’s a “strong rationale” for creating two focused businesses, Buechner said, and Akzo’s performance last year showed the time was right to contemplate separating specialty chemicals. PPG’s move just “pulled forward” this internal discussion, he said.

Unilever, fresh from fending off the Kraft Heinz Co. (Nasdaq: KHC) approach, also vowed to boost shareholder returns with a strategic review that might point to a breakup of the consumer-goods giant.