The Sherwin-Williams Company: Akzo Acquisition Could Pressure Sherwin's Valuation Multiple

Research evidence excerpt

The Sherwin-Williams Company: Akzo Acquisition Could Pressure Sherwin's Valuation Multiple

Deutsche Bank

Research

Rating Company Date

Hold The Sherwin-Williams 28 May 2026

Company

North America Reuters Bloomberg Rating Hold

United States SHW.N SHW US Price target (USD) 355.00

Price at 27 May 26 309.97

52-week range 375.23 – 299.05

Industrials

Chemicals / Specialty Valuation & Risks

Akzo Acquisition Could Pressure Sherwin's

Valuation Multiple DavidResearchBegleiterAnalyst

+1-212-250-5473

Low multiple Akzo assets could dilute high multiple Paint Stores Group assets

Emily Fusco While we view Sherwin’s bid for a portion of AkzoNobel’s (Akzo) coatings Research Associate

businesses as strategically sound, we believe the purchase of these assets could +1-212-250-5162

pressure Sherwin’s industry leading valuation multiple (’18.9x ‘26E EBITDA). This

is because the purchase of Akzo’s lower multiple auto refinish and industrial

coatings businesses would dilute the earnings contribution from Sherwin’s higher

multiple US architectural coating business from 63% of ’26E EBITDA to 55% of ‘27E

EBITDA.

€73/shr bid values Akzo at 12.0x ‘26E EBITDA

On May 27, Akzo, Sherwin and Nippon Paint announced that Sherwin and Nippon

Paint made a joint bid to acquire Akzo (AKZO. AS, Hold) for €73/shr, or $14.5B, and

a 39% premium to Akzo’s closing price on May 26. Based on Deutsche Bank

estimates, the €73/shr bid values AkzoNobel at 12.0x ’26E EBITDA.

The joint proposal was submitted on April 29 which followed a previous offer on April

16. On May 1 Akzo rejected the offer as Akzo’s Boards concluded that the proposal

was not superior to its merger of equals agreement with Axalta from either a share

price perspective or a deal certainty perspective and that the interests of Azko