Nippon Paint Holdings is buying Akzo Nobel’s decorative paints business in Southeast Asia for $1.35 billion, acquiring a regional slice of a business it had sought to buy in full. Japan’s No. 1 paint company, which had previously sought to buy Akzo’s entire residential and commercial paints unit for €7.5 billion ($8.4 billion), said that the deal spanning seven countries will be accretive to profits once the transaction is completed by mid-2027. The acquisition represents a partial victory for Nippon Paint after Akzo rejected multiple approaches for all of its decorative paints business, and bolsters its operations in Vietnam, Indonesia, Malaysia, Thailand, Singapore and Australia.
Based on the deal, Nippon Paint is paying a higher multiple for the regional units compared with its prior, broader offer. Nippon Paint called the new units “highly promising businesses, supported by robust distribution networks, brand recognition, and manufacturing and supply systems.” Akzo will retain full ownership of its coatings activities and global business services organization, according to the statement. Shares in Nippon Paint rose as much as 1.7% in early morning trading in Tokyo on Monday.
The stock is up around 12% this year. The Japanese company is financing the purchase with bank borrowings and cash rather than new shares. Nippon Paint and Sherwin-Williams had previously sought a joint bid for the entirety of the Dutch paint maker, but the proposal was rejected.
That evolved into an offer for the decorative paints business, and culminated in the latest deal. For Akzo, the disposal completes an Asian decorative-paints portfolio review following sales of its operations in India and Pakistan. The Southeast Asia businesses to be divested by Akzo generated $291 million in revenue and $65 million in earnings before interest, taxes, depreciation and amortization in 2025, both down from a year earlier, according to a presentation by Nippon Paint.
Akzo values the transaction at 21 times 2025 Ebitda, while Nippon Paint puts it at about 16 times projected 2026 Ebitda. By comparison, Nippon Paint’s rejected proposal for Akzo’s entire decorative-paints division implied a multiple of roughly 11.5 times 2025 Ebitda. Nippon Paint said it expects integration benefits to support the price, with annual savings in high-single-digit percentages of sales from joint procurement, production and logistics, cross-selling and lower overhead.
Akzo, which is merging with Axalta Coating Systems, expects net cash proceeds of about $1 billion after taxes and payments to minority partners.
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