Nippon Paint Holdings Co. made a shock counter-bid for Axalta Coating Systems Ltd., derailing amicable merger talks between the U.S. firm and paint maker Akzo Nobel NV because the Japanese agency makes an attempt its largest acquisition.
There’s no badure a deal will probably be reached, Nippon Paint stated in a inventory trade badertion Wednesday with out disclosing the monetary phrases of its provide. Axalta, whose shares gained to their highest stage in additional than two years in New York buying and selling Tuesday, confirmed the bid. The Philadelphia-based firm had a market worth of $eight.25 billion whereas Nippon Paint has a market capitalization of $10.three billion.
Axalta, a former DuPont unit, has posted revenue declines for 2 straight quarters amid rising prices for paint elements. The firm’s largest shareholder Warren Buffett’s Berkshire Hathaway Inc. Founded in 1881, Nippon Paint is the most important paint maker in Asia, in response to its web site.
Nippon Paint has reported spending at the least $1.three billion shopping for different firms since 2006, together with final December’s acquisition of U.S.-based Dunn-Edwards, in response to knowledge compiled by Bloomberg. In 2014, the Japanese paint-maker acquired a number of China-based ventures from Wuthelam Holdings Ltd., turning them into badociates.
Nippon Paint shares slumped four.5 p.c to three,535 yen in Tokyo earlier than buying and selling was halted Wednesday. That’s the bottom stage for the inventory since February. Akzo Nobel shares rose 1.eight p.c to 79.34 euros as of 9:57 a.m. in Amsterdam.
Osaka-based Nippon Paint reported web gross sales of 470.2 billion yen ($four.2 billion) for the 12 months ended March 31, whereas Axalta’s income was $four.1 billion within the 12 months by way of December 2016.
Japanese firms have introduced $83.1 billion of abroad acquisitions this 12 months, down from $91.6 billion throughout the identical interval final 12 months, in response to knowledge compiled by Bloomberg.
Reuters reported earlier that Axalta obtained an all-cash provide from Nippon Paint.
The collapse of the Akzo Nobel-Axalta talks additionally marks the newest twist in a wave of dealmaking within the chemical trade. Akzo has come beneath shareholder strain this 12 months after rebuffing an unsolicited $29 billion buyout provide from rival PPG Industries Inc. and battling activist investor Elliott Management Corp.
Adding to the squeeze, Akzo Nobel has seen U.S. rival Sherwin-Williams Co. purchase native competitor Valspar Corp. A merger with Axalta would have been a deterrent ought to PPG nonetheless maintain ambitions for a takeover at a later stage.
In a separate launch, Akzo stated it remained centered on separating its specialty chemical enterprise and badembly its 2020 monetary targets.
PPG can renew its bid for Amsterdam-based Akzo on Dec. 1 beneath Dutch takeover guidelines. Akzo, which is planning to separate its chemical division to deal with coatings, would have bulked up with an Axalta mixture in a possible deterrent to a renewed method by PPG. Akzo’s former suitor has stated it has little interest in making one other provide.