Nippon Paint makes another proposal to acquire AkzoNobel

Research evidence excerpt

Nippon Paint makes another proposal to acquire AkzoNobel

Nomura | Nippon Paint makes another proposal to acquire AkzoNobel 14 July 2026

AkzoNobel reported decorative coating sales of ¥691.0bn.

In 25/12, AkzoNobel's decorative paint business generated sales of €4.09bn (¥691.0bn)

and operating profits of €401mn (¥68.0bn). We estimate that Nippon Paint Holdings'

decorative paint business generated sales of ¥1trn and operating profits of ¥141.0bn in

25/12.

As for the acquisition price presented in May, the FY26 Bloomberg consensus forecast for

EV/EBITDA for AkzoNobel as a whole was around 11x. In the paint industry, margins and

valuations on decorative coatings are normally higher than those on automotive coatings,

and therefore the latest proposal may not differ much from the acquisition scheme

announced in May (EV/EBITDA of 12x on FY26 forecasts for the decorative paint

business alone). Given that AkzoNobel has commented that the proposal substantially

undervalues the decorative paint business, we think that Nippon Paint Holdings could

revise the acquisition price and make a fresh proposal. Nippon Paint Holdings has also

consistently stated that its policy is to pursue acquisitions only when they are expected to

raise EPS from the first fiscal year.

Potential boost to sales in Europe from consistent branding as well as cost savings

Nippon Paint Holdings owns the Dulux brand in Australia and elsewhere, and AkzoNobel

operates the Dulux brand in regions including Europe and China. If Nippon Paint were to

acquire AkzoNobel's decorative paint business, we think it would be able to not only

reduce R&D costs and other common costs but also pursue a more consistent approach

to the Dulux brand on a global basis. Nippon Paint Holdings has substantial sales of