Dulux owner Akzo Nobel is nearing a deal to sell its south-east Asian decorative paints business to Nippon Paint, handing its Japanese rival a small victory after previous attempts at larger deals failed. The Dutch group could reach an agreement to sell the unit for well over $1bn as early as Monday, according to people familiar with the talks, who said the divestment would include decorative paint operations in Vietnam, Indonesia, Malaysia, Thailand and Singapore, as well as Papua New Guinea and Australia.
The disposal would follow through on an earlier pledge by Akzo Nobel chief executive Grégoire Poux-Guillaume to withdraw from peripheral markets in south-east Asia where the company is not a market leader. Poux-Guillaume is also working to complete Akzo Nobel’s merger with US peer Axalta, announced in November, which would create a New York-listed paint and chemicals group with an enterprise value of about $25bn.
The south-east Asia divestment, which is unrelated to approval for the Axalta deal, comes after Nippon failed in previous attempts to pursue larger deals. These included a €7.5bn bid in July for all of Akzo Nobel’s decorative paint business as well as a €13bn full takeover proposal in May alongside US peer Sherwin-Williams. Nippon remains interested in a larger deal for the decorative paint business, some of the people said.
Akzo Nobel declined to comment. Nippon could not immediately be reached for comment. Shareholders in August approved the Akzo-Axalta combination, which will have a single listing in New York while maintaining dual headquarters in Amsterdam and Philadelphia. The combined company would have annual revenues of about $17bn, making it one of the world’s largest coatings groups.
Source: Financial Times Companies · Summarized by HeadlinesBriefing