Key facts
- AkzoNobel is nearing a deal to sell its decorative paints business in Southeast Asia to Nippon Paint for over $1 billion, according to the Financial Times.
- Nippon Paint has made multiple offers for AkzoNobel's decorative paints business, with one proposal indicating an enterprise valuation of 7.5 billion euros ($8.55 billion).
- AkzoNobel confirmed receiving these proposals but stated they undervalue the business.
- AkzoNobel's boards continue to recommend a merger with U.S. coatings maker Axalta Coating Systems Ltd.
AkzoNobel is reportedly close to selling its decorative paints business in Southeast Asia to Nippon Paint for over $1 billion, according to a Financial Times report citing people familiar with the matter. Reuters could not immediately verify the report.
AkzoNobel itself confirmed that it has received multiple conditional and non-binding proposals from Nippon Paint Holdings Co. for its Decorative Paints business. The indicative enterprise valuation for these proposals was 7.5 billion euros (approximately $8.55 billion) on a cash-free and debt-free basis. However, AkzoNobel stated that these proposals undervalue its business and are considered an Alternative Proposal under its existing merger agreement with Axalta Coating Systems Ltd., restricting engagement.
The Dutch company's Board of Management and Supervisory Board continue to unanimously recommend the merger of equals between AkzoNobel and Axalta, citing compelling strategic rationale and benefits. Nippon Paint had previously sought to acquire AkzoNobel's entire business with U.S.-based Sherwin-Williams for 12.5 billion euros, but that bid was rejected.