For Nippon Paint, the transaction significantly expands a decorative-paints platform it already operates across the region through the NIPSEA Group and DuluxGroup. Nippon Paint describes the acquisitions as strategic “bolt-on” transactions that will expand its customer reach while adding established brands, manufacturing assets and R&D capabilities.

The acquisition perimeter includes three production sites as well as an R&D center in Malaysia. Nippon Paint said the businesses serve both retail channels, including small and large stores, and project customers such as developers and contractors. Dulux is the core brand of the businesses being acquired.

Transaction Spans Seven Markets

The deal is structured through several Nippon Paint subsidiaries.

Nippon Paint Singapore Company Pte. Ltd. will acquire shares in AkzoNobel’s Decorative Paints subsidiaries in Vietnam and Singapore, while Nippon Paint (Malaysia) Sdn Bhd will acquire the Malaysian subsidiary.

Nippon Paint (H.K.) Company Limited will separately acquire a 100% interest in AkzoNobel’s Decorative Paints joint venture in Indonesia, purchasing interests from both AkzoNobel and its partner.

In Thailand, the Decorative Paints operations will be transferred to Nippon Paint Decorative Coatings (Thailand) Co., Ltd. The Australian and Papua New Guinea businesses will be transferred to DuluxGroup Limited.

Nippon Paint said the Indonesia acquisition is legally separate from the other share acquisitions and business transfers.

The agreements were signed Oct. 3. The Indonesia transaction is expected to close in late 2026, while completion of the remaining transactions is expected in mid-2027, subject to regulatory approvals, customary closing conditions and completion of carve-out work. 

Businesses Projected to Exceed $330 Million in 2026 Revenue

The operations generated revenue of $299 million in 2024 and $291 million in 2025, according to Nippon Paint. EBITDA was $69 million in 2024 and $65 million in 2025, representing EBITDA margins of 23% and 22%, respectively.

For 2026, Nippon Paint projects revenue of more than approximately $330 million and an EBITDA margin of approximately 26%.

AkzoNobel describes the $1.35 billion valuation as approximately 21x fiscal 2025 EBITDA. Nippon Paint's investor presentation cites an acquisition multiple of approximately 16x, based instead on projected 2026 EBITDA. The difference reflects the periods used for the calculations rather than different transaction values. 

AkzoNobel expects net cash proceeds of approximately $1 billion (€0.9 billion) after taxes and payments to minority partners.

Nippon Paint said the purchase will be financed through bank borrowings and cash on hand, with no equity financing planned. The company expects the acquisitions to be accretive to earnings per share beginning in the first year and expects return on invested capital to exceed its weighted average cost of capital by the third year. Pro forma leverage at the end of fiscal 2026 is projected at approximately 2.8x.

Nippon Paint said the impact of the transactions on its financial results for the year ending Dec. 31, 2026, is expected to be insignificant.

Nippon Paint Targets Procurement, Production and Sales Synergies

Nippon Paint expects the acquired operations to benefit from its existing distribution networks, brand recognition and supply infrastructure across Southeast Asia.

The company said annual run-rate synergies are expected to reach at least a high-single-digit percentage of sales. It identified four principal sources: procurement and raw materials, production and logistics, sales and cross-selling, and SG&A.

On the raw-material side, Nippon Paint expects joint procurement and supplier consolidation to improve purchasing economics. Manufacturing plans could be integrated to improve capacity utilization and eliminate overlapping investment, while logistics networks and site operations would also be reviewed.

Commercially, the company intends to combine the acquired product portfolio with its existing brands, expand dealer and store networks and increase coverage across both retail and project channels. Nippon Paint specifically identified Indonesia and Vietnam as markets where it sees opportunities for additional store openings and retailer development.

The company also plans to use the combined portfolio to pursue cross-selling and premiumization, saying the Dulux brand could play an increasingly important role as Southeast Asian consumer preferences shift toward higher-value products. 

Nippon Paint said integration plans are intended to maintain business continuity, including keeping key locations and personnel and using migration-service agreements where necessary.

“The successful completion of our Asia portfolio review is part of an ongoing strategy to focus our portfolio on areas where we can achieve differentiating scale and strengthen our position,” AkzoNobel CEO Greg Poux-Guillaume said.

“We’re grateful to all our colleagues in Asia for helping us establish a series of excellent Decorative Paints businesses with strong brands and products. We trust that Nippon Paint, in combination with their own businesses in those countries, will build on that momentum.”

Wee Siew Kim, director, representative executive officer and co-president of Nippon Paint, said the company is looking forward to bringing the businesses and their employees into the group.

“We are excited to welcome these businesses and talented teams to our Group, with our shared ambition to create lasting value for our customers and partners,” Kim said. “We look forward to building on the strong foundations established by AkzoNobel, while continuing to deliver the quality, experience and local expertise that customers have come to value.”

Deal Follows Broader Nippon Paint Pursuit of AkzoNobel

The transaction also adds another chapter to a series of strategic moves involving the two companies.

Earlier this year, Nippon Paint made several conditional proposals to acquire AkzoNobel’s entire Decorative Paints business, ultimately reaching an indicative enterprise valuation of €7.5 billion. AkzoNobel said the offer represented an alternative proposal under its merger agreement with Axalta and significantly undervalued the business. PCI reported that proposal and its implications in July. 

That effort followed an even broader proposal from Nippon Paint and The Sherwin-Williams Co. to acquire AkzoNobel in its entirety. Under that proposed structure, Nippon Paint would have retained AkzoNobel’s Decorative Paints and Industrial Coatings operations, while Sherwin-Williams would have acquired Automotive & Specialty Coatings, Marine & Protective Coatings and Powder Coatings. The companies ended that pursuit in June after AkzoNobel rejected their offers. 

The newly announced $1.35 billion transaction is therefore considerably narrower, covering defined regional Decorative Paints assets rather than the global Decorative Paints business or AkzoNobel as a whole.

AkzoNobel Completes Asian Decorative Paints Review

For AkzoNobel, the deal represents the final major step in a broader rebalancing of its Asian Decorative Paints portfolio.

The company completed the sale of its Pakistan business to Packages Group on Sept. 30, in a transaction carrying an enterprise value of approximately €50 million. That divestment included Decorative Paints and liquid Coatings operations. 

AkzoNobel also completed the sale of Akzo Nobel India Ltd. to JSW Group in December 2025. That transaction, valued at approximately €1.4 billion, included the liquid paints and coatings business, while AkzoNobel retained its India Powder Coatings operation and International Research Center.

AkzoNobel said the Southeast Asia transactions, together with the India and Pakistan divestments, mark the conclusion of its Decorative Paints portfolio review in Asia.

The company said it will now continue focusing on completion of its proposed merger with Axalta Coating Systems Ltd.

That process remains active. On Oct. 1, PCI reported that the European Commission formally published notification of the AkzoNobel-Axalta combination under Case M.12269, although that publication does not constitute regulatory clearance.

The U.K. Competition and Markets Authority also opened its formal Phase 1 investigation in September, with a Nov. 11 deadline for its first decision. 

AkzoNobel and Axalta shareholders approved the proposed all-stock merger in August. The companies have said the combination would create a coatings company with approximately $17 billion in annual revenue and an enterprise value of approximately $25 billion.

The agreement shifts established decorative-paint brands, manufacturing capacity, R&D resources and raw-material purchasing volume to Nippon Paint across one of the industry's key growth regions. It also completes AkzoNobel's Asian Decorative Paints review while narrowing the company's strategic focus as it works toward the proposed Axalta combination. For coatings manufacturers and suppliers, the planned integration could affect regional procurement, production networks, distribution and supplier relationships.