Nippon Paint Pays Up for Akzo’s Smaller Asia Paints Slice

Nippon Paint Holdings agreed on Oct. 5 to buy AkzoNobel’s decorative paints business in seven Asia-Pacific markets for $1.35 billion. The Japanese group, Asia’s largest paint maker, had spent 2026 trying to buy far more of the Dutch company and failed.

AkzoNobel would not sell the whole decorative unit at about 11.5 times 2025 earnings. It will now sell this smaller slice at 21 times last year’s earnings, keep its coatings arm, and point the cash at its merger with Axalta Coating Systems.

Seven Countries Change Hands for $1.35 Billion

AkzoNobel signed binding deals covering decorative paints in Vietnam, Indonesia, Malaysia, Thailand, Singapore, Papua New Guinea and Australia. Coatings stay with the Dutch company, as does its global business-services group. Net cash after tax and payments to minority partners is expected at about $1 billion (€0.9 billion), which leaves roughly $350 million of the headline price in taxes and partner payouts.

Nippon Paint, in its Oct. 5 notice on the acquisition, said it will fund the purchase with cash and bank borrowings and will not issue new shares. It called the units highly promising businesses, backed by distribution, brands, and manufacturing. The target is still a shrinking one on the figures it put in its own briefing pack.

THE TARGET’S 2024-25 SCORECARD

• 2025 sales: $291 million, down from $299 million in 2024, a drop of about 2.7%.
• 2025 earnings: $65 million of EBITDA, down from $69 million, a drop of about 5.8%.
• EBITDA margin: 22% in 2025, after 23% in 2024.
• Nippon Paint group: 1,774.2 billion yen of 2025 sales and 278.1 billion yen of adjusted operating profit, so the bought units are a thin slice of the whole.

The deal is expected to add to Nippon Paint’s profit after it closes, with most of the map transferring around mid-2027. Effect on the year ending Dec. 31, 2026 is expected to be small, because only Indonesia is due to complete in late 2026.

WHERE THE PAINT BUSINESSES SIT

• Vietnam and Singapore: Nippon Paint Singapore buys the decorative subsidiaries.
• Malaysia: Nippon Paint (Malaysia) buys the local unit.
• Indonesia: Nippon Paint (H.K.) takes 100% of the decorative joint venture from AkzoNobel and its partner.
• Thailand: Assets move to Nippon Paint Decorative Coatings (Thailand), including receivables, inventory and other working capital.
• Australia and Papua New Guinea: Operations move to DuluxGroup, Nippon Paint’s existing Australian paints home, on the same asset-transfer pattern as Thailand.

That split is why the sale is several contracts, not one share purchase, and why Indonesia can close on its own clock.

Nippon Paint Pays a Higher Multiple Than Its July Bid

AkzoNobel put an enterprise value of about $1.35 billion (€1.20 billion) on the seven-country package and said that is 21 times 2025 EBITDA. Nippon Paint puts the same cheque at about 16 times projected 2026 EBITDA. Both figures describe this deal; they rest on different years.

In July, Nippon Paint’s rejected proposal for AkzoNobel’s entire decorative-paints division implied about 11.5 times 2025 EBITDA on a €7.5 billion ($8.4 billion) price. The regional units therefore cost more, as a multiple of last year’s earnings, than the larger business Tokyo could not buy. Nippon Paint said yearly savings in high-single-digit percentages of sales, from joint buying, plants, logistics, cross-selling and lower overhead, are what support the price.

HOW THE PRICES COMPARE

India cleared at 25 times, so a 21 times tag on trailing earnings is not the richest Asia paints cheque AkzoNobel has taken. It is still a much dearer multiple than the 11.5 times Nippon Paint tabled for the full decorative book, and it is being paid for a business whose 2025 sales and earnings both fell.

Why Indonesia Closes Months Ahead of the Rest

The Indonesia leg is a separate share deal. Nippon Paint (H.K.) is buying the entire decorative joint venture from AkzoNobel and the local partner, which is why minority payouts sit in the $1 billion net-cash line. AkzoNobel said that piece is due to complete in late 2026, subject to the usual closing conditions, including regulatory approvals.

The other six markets are due around mid-2027. Thailand, Australia and Papua New Guinea are written as transfers of receivables, inventory and other assets and liabilities rather than as simple share buys, which lengthens the paperwork. Completion of the map therefore lands in two waves, and so does AkzoNobel’s cash.

Nippon Paint shares rose as much as 1.7% in early Tokyo trade on Oct. 5. The stock is up about 12% in 2026. The company is not asking shareholders to fund the cheque with new equity.

The Same Shops Already Carry Both Brands

This is not a blank-map entry. AkzoNobel’s chief executive, Greg Poux-Guillaume, said as much when he handed the units over, pointing to Nippon Paint’s existing operations in the same countries.

We’re grateful to all our colleagues in Asia for helping us establish a series of excellent Decorative Paints businesses with strong brands and products. We trust that Nippon Paint, in combination with their own businesses in those countries, will build on that momentum.

Greg Poux-Guillaume, CEO, AkzoNobel statement, Oct. 5, 2026

In Vietnam, independent paint shops already hang a red Nippon fascia over racks that also hold Dulux tins. The two brands share the same counters and the same painters, which is the local trade, not a future plan. Buying AkzoNobel’s decorative arm there folds a shelf rival into a network Nippon Paint has been building since the 1990s, rather than opening a new country.

Australia is the same story in a different wrapper. The AkzoNobel decorative operations in Australia and Papua New Guinea move into DuluxGroup, which already houses DuluxGroup’s Australian paint brands. Wee Siew Kim, a director, representative executive officer and co-president of Nippon Paint, said the group wants to welcome the teams and keep the quality and local know-how customers already buy.

Poux-Guillaume framed the sale as the end of an Asia decorative review, “part of an ongoing strategy to focus our portfolio on areas where we can achieve differentiating scale and strengthen our position.” Scale, in this telling, is not more wall paint in Hanoi or Jakarta. It is a coatings company that can match Axalta.

Two Cash Offers Died Before This Slice Sold

The $1.35 billion cheque is the remnant of a much larger 2026 campaign. Nippon Paint and Sherwin-Williams tried to buy all of AkzoNobel for cash and split it, then Nippon Paint tried to buy the decorative unit alone, and AkzoNobel’s boards said no both times.

HOW THE BIDS SHRANK

1. November 18, 2025: AkzoNobel and Axalta announce an all-stock merger of equals, with an enterprise value of about $25 billion and combined 2024 sales of about $17 billion.
2. December 10, 2025: AkzoNobel completes the sale of its India liquid paints and coatings business to JSW Group at an enterprise value of about €1.4 billion, or 25 times EBITDA, while keeping India powder coatings and an international research center.
3. May 27, 2026: AkzoNobel rejects a €12.5 billion ($14.5 billion) cash offer, at €73 a share, from Nippon Paint and Sherwin-Williams. The Dutch boards said the bid undervalued the company, lacked certainty on regulatory clearances, and would have split AkzoNobel between the two buyers, with Nippon Paint keeping decorative paints and industrial coatings and Sherwin-Williams taking automotive, marine and powder.
4. June 3, 2026: Nippon Paint and Sherwin-Williams ended their joint cash offers after that second rejection.
5. July 2026: AkzoNobel confirms multiple Nippon Paint proposals for the decorative-paints business, including a €7.5 billion ($8.4 billion) valuation, and says the offer undervalues the unit. The boards keep backing the Axalta merger.
6. October 5, 2026: Binding deals are signed for decorative paints in the seven Asia-Pacific markets at $1.35 billion.

A regional purchase is a cleaner bite than a breakup of the whole Dutch group, which is the case some market readers made as the news hit. It is also the only bite AkzoNobel would take. The July multiple on the full decorative book was about 11.5 times 2025 earnings. The slice that actually sold is 21 times those earnings on AkzoNobel’s maths.

Axalta’s $25 Billion Merger Now Has a Cleaner Asia Map

AkzoNobel said it will now fully focus on closing the merger with Axalta, announced on Nov. 18, 2025. That deal is an all-stock merger of equals. Axalta holders receive 0.6539 AkzoNobel shares per Axalta share. AkzoNobel holders are due 55% of the combined company and a special cash dividend equal to €2.5 billion minus ordinary 2026 dividends paid before close. Axalta holders are due 45%.

The companies pointed to about $600 million of run-rate cost synergies, with 90% expected inside three years after close, mainly from buying, overhead, plants and supply chain. Combined sales were put at about $17 billion, with adjusted EBITDA of $3.3 billion once synergies are in, and the close window is late 2026 to early 2027, subject to shareholder votes, regulators, a New York listing step and Dutch works-council process.

The Southeast Asia cash does not fund that merger on day one. Indonesia is due in late 2026; the other six markets around mid-2027. Axalta’s own close sits in the same broad window as the first cheque and well before the second. What the sale does immediately is take Asia decorative paints off the to-do list, after India and Pakistan have already gone, so the Dutch company can argue it has finished that review.

Poux-Guillaume will be chief executive of the combined coatings group. Rakesh Sachdev, Axalta’s chair, will chair the new board. Dual offices are planned in Amsterdam and Philadelphia, with a later single listing in New York.

No Further Decorative Assets on AkzoNobel’s Block

AkzoNobel has now sold decorative paints in India, Pakistan and these seven Asia-Pacific markets and says the Asia review is done. It will keep decorative paints in the regions where it still wants scale, and it will keep coatings everywhere in this package, including in the countries Nippon Paint is buying. There is no stated plan to auction the European decorative book that Nippon Paint priced at €7.5 billion in July.

Nippon Paint grows by buying local paint businesses and leaving their brands in place. This purchase fits that habit, and it fits the shops that already sell both names. It does not reunite Dulux worldwide, which is what a full decorative takeover would have done, and it does not give Sherwin-Williams the automotive, marine and powder split it sought in May.

The first cash is due when Indonesia completes in late 2026. The rest follows around mid-2027 if regulators agree. Until then AkzoNobel still owns the tins, Nippon Paint still has a signed cheque at 21 times last year’s earnings, and the Axalta clock runs on a parallel track.