Nippon Paint Holdings Co. made a surprise counter-bid for Axalta Coating Systems Ltd., derailing amicable merger talks between the U.S. 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 Wednesday that there’s no guarantee a deal would be reached. Axalta had a market value of $8.3 billion based on its Tuesday 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, according to its website.
Nippon Paint shares slumped 4.5 percent to 3,535 yen in Tokyo before trading was halted Wednesday pending an announcement by the company. That’s the lowest level for the stock since February, giving it a market value of $10.2 billion. Akzo Nobel shares rose 1 percent to 78.76 euros as of 9:23 a.m. in Amsterdam.
Osaka-based Nippon Paint reported net sales of 470.2 billion yen ($4.2 billion) for the year ended March 31, while Axalta’s revenue was $4.1 billion in the year through December 2016.
Reuters reported earlier that Axalta received an all-cash offer from Nippon Paint.
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 $29 billion buyout offer from rival PPG Industries Inc. and battling activist investor Elliott Management Corp.
Adding to the squeeze, Akzo Nobel has seen U.S. rival Sherwin-Williams Co. acquire local competitor Valspar Corp. A merger with Axalta would have been a deterrent should PPG still hold ambitions for a takeover at a later stage.
In a separate release, Akzo said it remained focused on separating its specialty chemical business and meeting its 2020 financial targets.
PPG can renew its bid for Amsterdam-based Akzo on Dec. 1 under Dutch takeover rules. Akzo, which is planning to separate its chemical division to focus on coatings, would have bulked up with an Axalta combination in a potential deterrent to a renewed approach by PPG. Akzo’s former suitor has said it has no interest in making another offer.