EU/US: Paint giants call off merger over unsolicited offer

Nippon Paint has gatecrashed friendly talks between US based Akzo and a Dutch rival by submitting an all-cash takeover bid for Axalta Coating Systems, in a rare intervention by a Japanese company in cross-border dealmaking. According to people close to the situation, Nippon Paint submitted an offer this week that valued Axalta at a much higher premium to the figure being contemplated by the US group as it held talks with Amsterdam-based AkzoNobel.

In response, Axalta and Akzo announced late on Tuesday, November 21, that they had terminated discussions about a merger after failing to reach terms. Axalta said on Wednesday that it was in talks with Nippon Paint about selling itself to the Japanese group, but added that there could be no assurances that a definitive agreement would be reached by the parties.

Nippon Paint confirmed that it had made “a proposal” but did not give details and cautioned that there was no certainty of any deal. As in other industries in Japan, paintmakers are seeking overseas expansion as they try to escape shrinking domestic markets, boost growth and take advantage of ultra-low borrowing rates. Nippon Paint and smaller rival Kansai Paint have both stated a desire to secure a stronger place in the global coatings business.

Full Content: Deal Street Asia

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