By Elsie Kamsiyochi
Paint giant AkzoNobel, the company behind the globally recognized Dulux brand, has firmly rejected a €12.5 billion takeover proposal from rivals Nippon Paint and Sherwin-Williams, setting the stage for what could become one of the biggest corporate battles in the coatings industry in years.
The Dutch multinational dismissed the all-cash offer, valued at €73 per share, arguing that it significantly undervalued the company and failed to provide sufficient certainty regarding regulatory approval. The proposal represented a 39% premium over AkzoNobel’s previous closing share price of €52.52, yet the company’s leadership remained unconvinced that the deal reflected its long-term strategic value.
Despite the rejection, investors reacted enthusiastically to the news. AkzoNobel shares surged nearly 20%, climbing to around €63 during trading and marking one of the company’s strongest single-day stock performances since the global financial crisis of 2008. The sharp rise reflected investor optimism that either a higher bid may emerge or that AkzoNobel’s market value had previously been underestimated.
At the center of the dispute is AkzoNobel’s broader vision for its future. Rather than entertaining the unsolicited offer from Nippon Paint and Sherwin-Williams, the company continues to support its previously announced merger with American coatings manufacturer Axalta. That merger, expected to be finalized between late 2026 and early 2027 pending shareholder approval, would create a coatings powerhouse valued at approximately $25 billion.
Under the proposed merger agreement, AkzoNobel CEO Greg Poux-Guillaume would lead the newly combined company. Executives have projected annual savings of around $600 million, with much of the efficiency gains expected within the first three years after integration. Company leaders believe the partnership with Axalta offers stronger long-term growth prospects and more operational stability than the rival takeover proposal.
The rejected bid from Nippon Paint and Sherwin-Williams would have significantly reshaped AkzoNobel’s business. According to the proposal, Nippon Paint intended to retain AkzoNobel’s decorative paint and industrial coatings divisions, while Sherwin-Williams would acquire parts of the company focused on automotive, marine, and powder coatings. The arrangement would effectively split AkzoNobel into separate business segments between the two suitors.
Although both companies emphasized that their proposal came with no financing conditions and required no shareholder approval on their side, AkzoNobel’s board argued that the deal lacked enough certainty, particularly around antitrust and regulatory clearances. Company representatives stated that neither the takeover proposal nor its terms qualified as a stronger alternative compared with the already agreed Axalta merger.
Still, market analysts believe the story may be far from over. Some investment experts suggested the timing of the takeover attempt may have been strategic, arriving during a period when AkzoNobel’s share price had weakened. Analysts at brokerage firm MKI indicated the consortium of Nippon Paint and Sherwin-Williams may still have “more up its sleeve,” hinting that a revised or higher offer could potentially emerge in the coming weeks or months.
This is not the first time AkzoNobel has found itself resisting takeover pressure. In 2017, the company famously rejected repeated acquisition attempts by American paint producer PPG Industries, choosing instead to remain independent. That earlier battle highlighted the company’s willingness to defend its autonomy against aggressive suitors.
A major obstacle facing any future takeover effort is AkzoNobel’s unique Dutch anti-takeover structure. The company has a legal protection mechanism known as a “stichting,” which holds special voting rights designed to block hostile bids. This entity remains strongly supportive of the Axalta merger and could potentially prevent an unwanted acquisition, even if shareholders became divided over the company’s future direction.
Because of these structural defenses, analysts believe Nippon Paint and Sherwin-Williams would likely need to present a substantially improved financial offer — alongside stronger guarantees about strategy, regulation, and business continuity — if they hope to convince AkzoNobel’s leadership to reconsider.
For now, AkzoNobel appears committed to its merger path with Axalta, but the dramatic surge in its share price signals that investors are watching closely for the possibility of a renewed bidding war in the global paint and coatings market.
Source Reuters
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