Nippon Paint Holdings Co Ltd made an all-cash offer to acquire U.S. coatings company Axalta Coating Systems Ltd, two people familiar with the matter say, ending merger talks between Axalta and Dutch peer Akzo Nobel. Sonia Legg reports
It's not been a good year for the maker of Dulux paint. Since AkzoNobel rejected a $30 billion takeover bid by PPG Industries it's issued two profit warnings. The Dutch firm was looking to touch things up with a deal of its own. But it seems its target - Axalta - has been swayed by a new suitor. Japan's Nippon Paint Holdings has reportedly made an all-cash offer for the US coatings firm, who's largest shareholder is Warren Buffet's Berkshire Hathaway. (SOUNDBITE) (English) MIKE INGRAM, CHIEF MARKET STRATEGIST, WH IRELAND, SAYING: "They're probably regretting not putting more on the table for Axalta. The perfect poison pill for PPG - it would have made the merged AkzoNobel-Axalta entity pretty much indigestible for PPG. And I think to some extent it would have it would have won approval from AkzoNobel shareholders." Akzo has confirmed it's ended what it said would have been a "merger of equals." It's instead planning to either sell off or list its speciality chemicals division, worth an estimated 10 billion euros. PPG has said it won't rebid for Akzo but in theory it could. (SOUNDBITE) (English) MIKE INGRAM, CHIEF MARKET STRATEGIST, WH IRELAND, SAYING: "There was a six month cooling off period from the failed bid back in the summer. That ends on the 1st of December. So we've actually got just over one week before PPG could potentially put another bid in. And who's to say that the shareholders who have suffered two profit warnings since then wouldn't vote for that." For Nippon - Japan's biggest paint supplier - the Axalta deal could help it crack the US market and boost earnings from automotive coatings But an all cash buyout would require considerable capital. A near 5 percent fall in its share price after the news emerged won't help that.