Nippon Paint makes counter-bid for Axalta

TOKYO: Nippon Paint Holdings Co made a surprise counter-bid for Axalta Coating Systems Ltd, derailing amicable merger talks between the United States company and Dutch paint maker Akzo Nobel NV as the Asian firm attempts one of the biggest deals in its history.

The Japanese company, which didn’t elaborate on its offer, said in a stock exchange filing yesterday that there’s no guarantee a deal would be reached.

Axalta had a market value of US$8.3 billion (RM34.3 billion) based on its Tuesday’s closing price in New York.

Axalta, a former DuPont unit, has posted profit declines for two straight quarters amid rising costs for paint ingredients.

The biggest shareholder of the Philadelphia-based company is Warren Buffett’s Berkshire Hathaway Inc.

Founded in 1881, Nippon Paint is the largest paint maker in Asia.

Nippon Paint shares slumped 4.5 per cent to 3,535 yen (RM130.5) before trading was halted yesterday pending an announcement by the company.

That’s the lowest level for the stock since February, giving it a market value of US$10.2 billion.

Osaka-based Nippon Paint reported net sales of 470.2 billion yen for the year ended March 31, while Axalta’s revenue was US$4.1 billion in the year through December 2016.

The collapse of the Akzo Nobel-Axalta talks also marks the latest twist in a wave of dealmaking in the chemical industry.

Akzo has come under shareholder pressure this year after rebuffing an unsolicited US$29 billion buyout offer from rival PPG Industries Inc and battling activist investor Elliott Management Corp. Bloomberg