Nippon Paint Holdings Co. (NPPHY), a Tokyo-listed paint group, has made several offers for Akzo Nobel NV (AKZOF), a Dutch paint maker, as it pursues the company's decorative paints business. Nippon made its first approach three weeks ago before submitting another proposal last week that valued the division at 7.5 billion, or about $8.6 billion, according to people familiar with the matter. The offer valued the business at roughly 12 times its expected 2026 earnings before interest, taxes, depreciation and amortization. Akzo Nobel's management did not engage with Nippon on the proposal and has not communicated the approaches to shareholders, while Nippon may still decide to end its pursuit because no final decision has been made.
The new offer comes one month after Nippon Paint and Sherwin-Williams Co. NYSE:SHW, a paint manufacturer, ended their joint effort to acquire all of Akzo Nobel after the Dutch company rejected two all-cash proposals. Akzo Nobel said the proposed acquisition could face difficulties securing regulatory approval and maintained that its merger agreement with Axalta Coating Systems Ltd. NYSE:AXTA, a coatings company, remained the superior transaction. The Axalta combination, announced last November, would create a paint maker with an enterprise value of about $25 billion, with Akzo Nobel owning 55% of the combined company and moving its stock market listing from Amsterdam to New York. However, the transaction still requires regulatory approval from the U.S. Federal Trade Commission, which requested additional information from both companies, according to a May filing.
A successful purchase of the decorative paints division could reunite the Dulux brand globally and strengthen Nippon Paint's position in Europe, where the business generates almost two-thirds of its revenue. Akzo Nobel previously said it was exploring a potential sale of parts of the decorative paints operation in Southeast Asia, but Nippon is focused on acquiring the entire unit and is unlikely to bid for that regional business alone. Investors may view the latest approach as another challenge to Akzo Nobel's preferred merger with Axalta, particularly because Nippon disrupted merger discussions between the two companies in 2017 before failing to reach an agreement to acquire Axalta itself. Akzo Nobel also rejected an unsolicited $29 billion takeover proposal from PPG Industries NYSE:PPG, a rival paint producer, during the same year.