Akzo Nobel cancels share buyback

"The world economy has now clearly entered a phase of lower growth, particularly in the mature markets," said Chief Executive Hans Wijers. "In these challenging markets, only lean companies succeed."

The company said it made sense not to return the money to shareholders until it has refinanced euro1.8 billion ($2.6 billion) worth of bonds coming due in the next eight months.

Akzo Nobel's profile has altered significantly over the past year, as it first sold its pharmaceuticals operations to Schering-Plough Corp. of the U.S. for around $14.5 billion, then purchased Britain's Imperial Chemical Industries PLC for euro11.5 billion ($17.5 billion). It sold ICI's adhesives business to Germany's Henkel AG for euro3.6 billion ($5.7 billion) as part of the deal.

The company reiterated it expects 2008 operating earnings slightly below last year's levels when comparing like-for-like operations.