On October 5, Dutch coatings giant AkzoNobel announced that it had reached an agreement with Nippon Paint to sell its decorative paints business in Southeast Asia, Australia and other markets for an enterprise value of approximately $1.35 billion. After taxes and minority interests, AkzoNobel expects to receive approximately $1 billion in net cash proceeds.
The transaction covers seven markets: Vietnam, Indonesia, Malaysia, Thailand, Singapore, Papua New Guinea and Australia. AkzoNobel said the deal is part of its strategy to “focus the business on areas where it can achieve differentiated scale and strengthen its leading positions.”
In May this year, Nippon Paint and Sherwin-Williams jointly offered €12.5 billion to acquire AkzoNobel as a whole, but the bid was rejected. In July, Nippon Paint made a standalone offer of €7.5 billion for AkzoNobel’s entire decorative paints business, which was also rejected.
After two unsuccessful attempts, Nippon Paint narrowed its target to AkzoNobel’s Southeast Asian and Australian operations, ultimately agreeing to acquire the business for $1.35 billion.
According to AkzoNobel, the business being sold generated $291 million in revenue and $65 million in EBITDA in 2025, representing an EBITDA margin of 22%. In 2024, revenue and EBITDA were $299 million and $69 million, respectively, with an EBITDA margin of 23%, indicating a slight decline in both revenue and earnings.
What Nippon Paint appears to be targeting is not simply the business’s current earnings. The Southeast Asian coatings market is estimated at around $7.78 billion in 2026, with decorative paints accounting for approximately 45%, making it the largest segment. Nippon Paint already has an established distribution network and brand presence in Southeast Asia through Nipsea Group. Acquiring AkzoNobel brands such as Dulux and Maxilite would allow Nippon Paint to integrate them directly into its existing business network.
AkzoNobel has already sold its decorative paints businesses in India and Pakistan, making this transaction the final step in its review of its Asian decorative paints portfolio. More importantly, AkzoNobel is moving forward with its merger with Axalta Coating Systems. The combined company is expected to generate annual sales of approximately $17 billion, with a stronger focus on industrial and automotive coatings. The Southeast Asian decorative paints business, which requires extensive local operations, is less aligned with that strategic direction. The approximately $1 billion in net cash proceeds will also provide a tangible financial buffer during the transition to the combined company.
Nippon Paint said the acquisition will be funded through bank financing and existing cash, with no new shares to be issued. The company expects annualized cost savings after integration to reach a high-single-digit percentage of sales. The transaction remains subject to regulatory approvals and is expected to close in 2027.
