Akzo Nobel NV (AKZOY) shares surged in Amsterdam Thursday after it rejected a $22.1 billion takeover bid from PPG Industries  (PPG - Get Report)  and said it would look at selling or floating one of its key business units in order to boost investor returns. 

PPG for its part has vowed to keep pursuing the maker of Dulux, Interpon, Sikkens and Eka paints.

Akzo said PPG offered to buy the Dutch chemicals group for around €83 per share, in cash and shares, a 29% premium to Akzo's Wednesday closing price of €64.42 that would value Akzo at around €21 billion ($22.1 billion). Akzo rejected the unsolicited bid, but said it would look at strategic alternatives, including the sale of its Specialty Chemicals business, which had €4.8 billion in sales last year.

Akzo Nobel shares rose more than 14% in early trading to change hands at €74.04 each, the highest in nearly two years. The Thursday gains take the three month advance to 21.7%.

"Our decision today was brought forward due to recent events," CEO Ton Buchner said. "The unsolicited proposal we received from PPG substantially undervalues our company and contains serious risks and uncertainties. The proposal is not in the interest of Akzo Nobel's stakeholders, including its shareholders, customers and employees, and we have unanimously rejected it."

"Along with my colleagues on our boards, our executive team and our thousands of employees, I firmly believe that AkzoNobel is best placed to unlock the value within our company ourselves," he added.

Dutch politicians, who are gearing up for a contentious election next week, have voiced concerns about the merger. The minister for economic affairs Henk Kamp said a combination was not in the best interest of the country. 

Pittsburgh-based PPG said it continued to believe there was a strong strategic rationale for the proposed transaction, adding that it will carefully evaluate how it will proceed with the transaction.

"We believe a combination of our two companies is a very compelling strategic opportunity. We are confident that this combination is in the best interests of the stakeholders of both companies as it presents a unique opportunity to build on the successful legacies of our businesses," PPG Chairman and CEO Michael McGarry said in a statement.

The combination of would create a stronger competitor in the global market "offering a broader line of products and technologies cost-effectively to a more diverse customer base," PPG said.

"PPG, in conjunction with its financial and legal advisors, has devoted significant time and resources to analyzing a potential combination of PPG and Akzo Nobel and is confident in its ability to execute and complete the proposed transaction and to obtain all necessary regulatory approvals," the company said.

PPG shares were marginally down 0.78% in Thursday premarket trading. Stock closed at $106.83 in New York Wednesday after rising 6% on the session, taking the three month gain to 7.46%.