Nippon Paint Holdings has submitted a proposal to acquire AkzoNobel's decorative paints business for €7.5 billion ($8.6 billion). This bid comes after Nippon Paint and Sherwin-Williams previously withdrew a joint $12.5 billion offer for the entirety of AkzoNobel, which was rejected in May due to concerns about undervaluation and regulatory clearance. AkzoNobel's management has reportedly not engaged with Nippon's latest offer and has not communicated it to shareholders. AkzoNobel also rebuffed an unsolicited $29 billion buyout offer from rival PPG Industries in 2017.
AkzoNobel is instead proceeding with its plan to merge with U.S. coatings maker Axalta. This deal, announced last November, would create a paint maker with an enterprise value of approximately $25 billion, with AkzoNobel owning 55% of the combined entity. The merger would also involve moving AkzoNobel's stock market listing from Amsterdam to New York. Shareholder meetings for the AkzoNobel-Axalta merger are scheduled for August 5.
Nippon Paint's offer values AkzoNobel's decorative paints unit at about 12 times its 2026 earnings before interest, taxes, depreciation, and amortization. If successful, the acquisition would reunify the Dulux brand globally and strengthen Nippon Paint's presence in Europe, as nearly two-thirds of the unit's revenue comes from the continent. Despite AkzoNobel exploring a sale of parts of its decorative paints unit in Southeast Asia, Nippon is focused on acquiring the entire unit.
Paint makers are pursuing mergers to consolidate and save money amid rising costs, intense competition, and economic uncertainties. Nippon Paint's shares experienced an intraday decline of up to 3.4% following the news of its offer. The AkzoNobel-Axalta merger still requires regulatory approval from the Federal Trade Commission in the U.S., which has requested additional information from both companies.
