€12.5 billion! Why did Nippon Paint’s joint acquisition bid fail?

Sherwin-Williams, though already the world’s top-selling paint company by revenue, still seeks to strengthen its capabilities in niche segments such as automotive coatings and protective coatings—areas where AkzoNobel has deep expertise. Strategically, this acquisition proposal made sense. But the problem was: AkzoNobel didn’t see it that way. Why launch the bid at this particular time? Nippon Paint’s timing was no impulsive decision. In November 2025, AkzoNobel had already reached a merger agreement with U.S.-based Axalta Coating Systems. The two companies planned an equal merger. According to reports, the combined entity is expected to generate approximately $17 billion in annual revenue, making it the world’s second-largest paint company—just behind Sherwin-Williams. For Nippon Paint, this was an ominous signal. Based on 2025 sales rankings, Nippon Paint ranked fourth globally—just under $200 million behind AkzoNobel. Once AkzoNobel and Axalta merged, the new company’s scale would significantly widen the gap with Nippon Paint. Thus, Nippon Paint’s joint acquisition bid with Sherwin-Williams carried an element of ‘interception’—an attempt to act swiftly before the AkzoNobel–Axalta merger became official, presenting a cash offer in hopes of altering the course of events. Why did AkzoNobel say no? Why did AkzoNobel reject the acquisition proposal? Based on currently available public information, we can make some educated inferences. AkzoNobel had already signed its merger agreement with Axalta and was progressing through regulatory and procedural formalities. Per the terms of that agreement, any subsequent acquisition proposal would need to be *clearly superior* to the existing deal to qualify as ‘better’. Nippon Paint and Sherwin-Williams offered €73 per share—a premium of roughly 39% over the pre-announcement share price. The market responded favorably at first, with the stock rising as much as 17%. Yet AkzoNobel’s board concluded that this price failed to fully reflect the company’s long-term intrinsic value. Another possible reason involves regulatory risk. The proposed model—joint acquisition followed by business divestiture—would likely trigger antitrust scrutiny in both the EU and the U.S. Notably, Sherwin-Williams and AkzoNobel already overlap significantly in automotive coatings and powder coatings. Regulators would likely require further asset spin-offs, introducing lengthy approval timelines and high uncertainty—risks AkzoNobel saw no need to take. Moreover, there was a less commercial—but equally critical—factor: concerns raised by employees, customers, and local communities remained inadequately addressed.

Global paint giants’ ‘acquisition rules’: How a $500-billion empire was assembled

PPG also acquired AkzoNobel’s North American architectural coatings business in 2013—the second-largest acquisition in the company’s history at the time. This deal expanded PPG’s customer base across the United States, Canada, and the Caribbean; it also propelled PPG past Sherwin-Williams to become the world’s largest paint company—at least temporarily. In 2014, PPG acquired Comex, Mexico’s largest architectural coatings manufacturer, further scaling up its operations. Data shows acquisitions played a decisive role in PPG’s strategic transformation. A decade ago, paint-related businesses accounted for about 55% of PPG’s total revenue; by 2014, that share had risen to roughly 90%. PPG successfully transformed from a diversified glass-and-chemicals enterprise into a specialized paint empire. Since then, PPG’s acquisition pace has barely slowed: from 1997 to today, it has completed over 50 acquisitions, with the combined sales of acquired companies exceeding $10.4 billion. Each move—from acquiring MacDermid, AkzoNobel’s North American architectural coatings business, to Nordic decorative coatings manufacturer Tikkurila—has strengthened PPG’s position. AkzoNobel: A Century-Plus Legacy of ‘Add-and-Subtract’ Acquisitions If one were to identify the most representative landmark on the global paint industry’s M&A map, AkzoNobel’s name would undoubtedly occupy a central position. Its corporate history itself constitutes a two-century-long narrative of mergers and acquisitions. Its predecessor was formed in 1969 through the merger of two Dutch chemical firms—AKU and KZO—while AKU itself traces back to Enka, a rayon producer founded in 1911. Yet the defining moment that cemented AkzoNobel’s status as a global paint leader was its 2007 acquisition of Imperial Chemical Industries (ICI), then the world’s fifth-largest paints and coatings manufacturer, for €11.8 billion. This deal brought AkzoNobel globally renowned decorative paint brands like Dulux, transforming it from a predominantly B2B-focused company into a comprehensive paint giant with strong B2C capabilities. What truly distinguishes AkzoNobel’s M&A strategy, however, lies not merely in ‘buying,’ but in its precise ‘buy-and-sell’ calculus. Prior to acquiring ICI, AkzoNobel had already sold its pharmaceutical division—Organon Biotech—to U.S.-based Schering-Plough for €11 billion, shedding a non-core, low-synergy business. Simultaneously with the ICI acquisition, AkzoNobel divested ICI’s adhesives and electronic materials businesses to Germany’s Henkel for €4 billion. This ‘one-buy-one-sell’ precision maneuver enabled AkzoNobel’s evolution from a diversified chemical conglomerate into a world-class enterprise focused exclusively on paints and specialty chemicals. Its strategic logic is straightforward: if it cannot become the industry leader in a given segment, exit early—and concentrate resources only on domains where it can achieve dominance. Nippon Paint’s ‘Comeback’: From Latecomer to Asia-Pacific Dominator Among global paint giants, Nippon Paint’s growth story stands apart—not purely ‘Western’ in origin, but shaped by a unique Japanese-Singaporean transnational heritage. Nippon Paint Co., Ltd. was founded in Japan in 1881. In 1962, it formed a joint venture with Singapore’s Wuthelam Group to establish the Nipsea Group, tasked with managing Nippon Paint’s operations across Southeast Asia.

AkzoNobel to sell SE Asia decorative paints unit to Japan’s Nippon Paint for $1.35bn

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AkzoNobel will sell its Southeast Asia decorative paints unit to Nippon Paint for $1.35 billion to focus on core businesses ahead of an Axalta merger. The deal covers multiple Asian markets and is expected to close by mid-2027.

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