AkzoNobel’s rejected cash offer from Nippon Paint Holdings Co. and The Sherwin-Williams Co. continues to draw attention as the companies weigh their next steps.

In a follow-up statement, as previously reported, Nippon Paint and Sherwin-Williams confirmed they submitted a joint proposal to acquire AkzoNobel and said they are considering next steps, if any. The companies said the proposal did not include financing conditions and was not subject to shareholder approval from either Sherwin-Williams or Nippon Paint. Under the proposal, Nippon Paint would acquire AkzoNobel’s Decorative Paints and Industrial Coatings business, while Sherwin-Williams would acquire its Marine & Protective Coatings, Automotive & Specialty Coatings and Powder Coatings businesses.

AkzoNobel has continued to support its planned all-stock merger with Axalta Coating Systems. Reuters reported that an AkzoNobel spokesperson said neither Nippon Paint/Sherwin-Williams proposal qualified as a “potentially superior” offer compared with the Axalta merger. Reuters also reported that AkzoNobel shares rose about 20% after the rejected offer became public.

The next major milestone is expected to be the shareholder vote on the AkzoNobel-Axalta merger. Axalta previously identified shareholder approval as the first major hurdle in the process, followed by regulatory review.

The news also drew strong reaction from PCI’s audience, with commenters raising questions about what additional consolidation could mean for competition, customer choice, R&D investment, technical service and segment-level disruption. Several readers pointed to the importance of regional and independent manufacturers, while others questioned which coatings markets could feel the impact first if either the AkzoNobel-Axalta merger or the rejected Nippon Paint/Sherwin-Williams structure ultimately reshapes the competitive landscape.

Sources: Reuters, Axalta

Related PCI Coverage

• AkzoNobel and Axalta previously announced a proposed merger of equals, outlining leadership structure and the expected approval process.

• PCI examined what the proposed AkzoNobel–Axalta merger could mean for the future of the paint and coatings industry, including comparisons to past transactions involving Sherwin-Williams and PPG.

• PCI’s Chief Editor reviewed the first week of industry and market reaction following the merger announcement.

• Two more stories about investor reactions can be found here:

• Cevian Capital Reportedly Backs the AkzoNobel–Axalta Merger
• Shapiro Capital Questions Akzo-Axalta Merger Terms