Shares of Dutch paint and coatings company AkzoNobel tumbled sharply on Wednesday after Nippon Paint and Sherwin-Williams ended their joint pursuit of the Amsterdam-based group. Trading in the stock was halted briefly before the shares dropped roughly 19% in early trade, moving toward what would be the largest single-day decline on record for the company.
The sell-off followed the two suitors walking away after AkzoNobel rejected their non-binding, all-cash approach worth €12.5 billion ($14.5 billion). That initial proposal had driven the stock approximately 20% higher when it was first announced.
In its decision to rebuff the offer, AkzoNobel said the proposal undervalued the business, did not provide sufficient regulatory certainty and would have resulted in the company being split between the two buyers. Under the structure outlined by the bidders, Nippon Paint would have retained AkzoNobel's decorative paints and industrial coatings operations, while Sherwin-Williams would have taken control of the automotive, marine and powder coatings divisions.
Analysts at Barclays, led by Katie Richards, noted that AkzoNobel rejected a €73-per-share bid from the combined Nippon/Sherwin approach. Barclays said that, although the valuation appeared low relative to precedent, the proposal has broadened the investment debate around AkzoNobel.
AkzoNobel previously turned down a similar overture from PPG Industries in 2017. On Wednesday the company said both of its boards had unanimously reaffirmed their support for the planned merger with US coatings maker Axalta. Shareholders are scheduled to vote on the Axalta transaction in early July, with an expected closing window in late 2026 or early 2027.
The proposed combination with Axalta would create an enterprise valued at $25 billion and is slated to be led by AkzoNobel chief executive Greg Poux-Guillaume. The parties have projected $600 million in annual cost savings resulting from the merger, with the majority of those savings expected to be realized within the first three years.
Barclays added that, if Axalta's €600m synergy target is fully delivered, the upside for shareholders would clearly exceed the second rejected offer of €73 per share. The bank said the €73-per-share bid, while not compelling on headline valuation, nonetheless challenged the prior assumption that AkzoNobel was not "in play."
Context and implications
The withdrawal of the joint bid prompted a rapid re-pricing of AkzoNobel equity as investors reacted to the sudden removal of a high-profile takeover route. The company's reaffirmation of the Axalta merger plan provides a clear alternative strategic path, with an explicit timeline for shareholder approval and an outlined target for cost synergies.
Market participants will likely continue to weigh the comparative valuations implied by the rejected cash offer and the potential upside from Axalta-linked synergies, while monitoring the upcoming shareholder vote and the timeline to closing.