Dutch paint maker cites merger restrictions, says bid undervalues unit
Nippon Paint Holdings made a €7.5 billion ($8.6 billion) bid for AkzoNobel’s decorative paints unit, the Japanese company said Monday, as it competes with the Dutch paint maker’s planned merger with U.S. rival Axalta Coating Systems.
AkzoNobel said the proposal significantly undervalues its decorative paints business and that it is restricted from any engagement with Nippon Paint because the approach constitutes an alternative proposal to its existing merger agreement with Axalta, according to a company statement. The company’s management and supervisory boards continue to unanimously recommend the merger of equals between AkzoNobel and Axalta, citing the deal’s strategic rationale and benefits.
The bid follows an earlier attempt by Nippon Paint to buy the entire AkzoNobel group for €12.49 billion and split it with Sherwin-Williams. AkzoNobel turned down that offer. Early last month, Nippon Paint and Sherwin-Williams said they dropped their joint efforts to acquire the Dutch company.
Shareholders of AkzoNobel and Axalta are scheduled to vote on their merger at meetings on Aug. 5.
Analysts at Bernstein wrote in a note to clients that a potential acquisition of AkzoNobel’s decorative paints unit by Nippon Paint is possible after the Axalta deal, but not at the offered price or in 2026.
Shares in Akzo rose 3.8% at the opening bell in Europe before paring gains, while Nippon Paint closed 2.1% lower in Tokyo.
Nippon Paint, which had a market value of roughly $15.4 billion as of Monday’s close, said no specific decisions have been made regarding the proposed acquisition. A deal would significantly expand the Japanese company’s size.
AkzoNobel, home to brands including Dulux, generated roughly 40% of its revenue from decorative paints last year, with performance coatings accounting for the rest. The company previously launched a review of its decorative paint portfolio in Asia and sold its business in India to JSW as part of that process.