Nippon Paint Launches €7.5 Billion Bid to Acquire Akzo Nobel’s Decorative Paints Unit

Nippon Paint Launches €7.5 Billion Bid to Acquire Akzo Nobel’s Decorative Paints Unit​

Nippon Paint Holdings Co. has escalated its pursuit of a major acquisition, making a significant follow-up offer for the decorative paints business of Akzo Nobel NV. According to sources familiar with the matter, the Tokyo-listed group made an initial bid three weeks ago and subsequently increased its offer value last week. The revised proposal places the entire unit at €7.5 billion ($8.6 billion).

Details of Nippon Paint’s Latest Acquisition Offer​

The reported offer values the decorative paints unit at approximately 12 times its 2026 earnings before interest, taxes, depreciation and amortization (EBITDA). However, people briefed on the situation confirmed that Akzo Nobel management has not engaged with Nippon regarding this bid. Furthermore, the offers have yet to be communicated to shareholders, and no final decision has been reached by any party.

Strategic Importance of the Decorative Paints Unit​

The successful acquisition would hold immense strategic value for Nippon Paint. Securing the unit would reunite the globally recognized Dulux brand under a single entity. Moreover, the move would substantially strengthen Nippon Paint’s presence in the European market. This is because the decorative paint unit derives almost two thirds of its total revenue from the continent.

Context within Broader M&A Landscape​

This bid comes amidst complex developments in the global coatings sector. Just one month prior to this latest offer, Nippon and Sherwin-Williams Co. concluded a joint bid for the entirety of the Dutch paint maker. That partnership ended after two all-cash offers were rejected by Akzo Nobel.

Akzo Nobel had previously noted that their existing agreement to merge with Axalta Coating Systems Ltd., which was announced last November, posed significant regulatory difficulty to the joint bidding structure. The deal between Akzo Nobel and Axalta is projected to have an enterprise value of about $25 billion. The Dutch firm would own 55% of the combined entity, and its stock market listing would migrate from Amsterdam to New York.

Nippon Paint’s Historical Involvement in Industry Mergers​

Nippon Paint has a history intersecting with these major industry mergers. In 2017, the company previously derailed merger talks between Axalta and Akzo Nobel. That year, Nippon also failed to reach an agreement to purchase Axalta outright. Furthermore, Akzo Nobel had previously rebuffed an unsolicited $29 billion buyout offer from rival PPG Industries in 2017.

Future Plans for Akzo Nobel’s Division​

Akzo Nobel has recently indicated that it is exploring a sale of parts of its decorative paints unit specifically within South East Asia. While Nippon Paint is focused on acquiring the entirety of the unit, sources stated that Nippon is unlikely to pursue an offer solely for that division alone. Neither representatives from Nippon nor Akzo Nobel responded to requests for comment regarding the ongoing bids.