AkzoNobel Rejects €12.5 Billion Offer from Nippon Paint and Sherwin-Williams, Sticks to Merger with Axalta

On May 27, 2026, AkzoNobel publicly disclosed that it has rejected a joint acquisition proposal submitted by Nippon Paint and Sherwin-Williams. The proposal offered €73 per share in cash for all outstanding shares of AkzoNobel, valuing the company at approximately €12.5 billion.

AkzoNobel has already signed a merger-of-equals agreement with Axalta, and the transaction is still in progress. The Board of Directors determined that the proposal from Nippon Paint and Sherwin-Williams does not constitute a "Superior Proposal" as defined in the merger agreement with Axalta.

Under the proposed arrangement, Nippon Paint would act as the acquiring entity launching a public cash tender offer. Upon completion, Nippon Paint would retain AkzoNobel's decorative paints and industrial coatings businesses, while the automotive and specialty coatings, marine and protective coatings, and powder coatings businesses would be sold to Sherwin-Williams. This would mean AkzoNobel would be split up and taken over by two separate companies.

Nippon Paint is currently one of the world's fourth-largest and Asia's largest coating manufacturers, having expanded significantly in overseas markets in recent years, particularly in China, Southeast Asia, and Australia. Sherwin-Williams is the world's largest coating manufacturer, with sales exceeding $23.5 billion in 2025.

AkzoNobel's Board of Directors believes that merging with Axalta can unlock greater long-term value compared to a direct sale. The two companies have strong complementarity in automotive coatings, industrial coatings, and high-performance materials, and their global customer and channel resources can be further integrated. According to previously disclosed data, the combined entity is expected to achieve approximately $600 million in annual synergies within three years following the merger.

Regulatory risk was another key consideration for the Board. The proposal from Nippon Paint and Sherwin-Williams involves not only a full acquisition but also subsequent business divestments and asset transfers, making the transaction structure inherently more complex. Notably, in the areas of automotive coatings, marine protective coatings, and powder coatings, Sherwin-Williams and AkzoNobel already have significant overlaps. The combined entity would likely face intense antitrust scrutiny in multiple markets, including the EU and the United States, and could even be forced to divest additional assets. In contrast, the merger between AkzoNobel and Axalta is more straightforward and carries comparatively lower regulatory uncertainty.

The Board also indicated that the acquisition proposal does not adequately address the interests of stakeholders, including employees, customers, and communities.

AkzoNobel has historically been cautious about external acquisitions. In 2017, the company repeatedly rejected multiple takeover offers from PPG Industries. At the time, management made it clear that it did not want the company to be broken up and sold, preferring instead to maintain business integrity through independent integration.

Facing the new proposal from Nippon Paint and Sherwin-Williams, AkzoNobel's stance has not changed significantly. Rather than being split up and taken over by two companies, the company clearly prefers a merger-of-equals with Axalta, preserving its own structural integrity while continuing to expand its global market presence.

In recent years, concentration in the global coating industry has continued to increase, with major players expanding their regional coverage and product lines through mergers and acquisitions. Nippon Paint seeks to enhance its influence in European and American markets through AkzoNobel, while Sherwin-Williams aims to strengthen its industrial coatings and high-performance coating businesses. AkzoNobel's ultimate choice of Axalta demonstrates that industry consolidation is no longer solely about the highest bid price. Post-transaction business stability, regulatory risk, and company control structure have also become key factors determining the direction of a deal.