AkzoNobel has declined a cash offer of €73 per share from Nippon Paint and Sherwin-Williams, the Dutch paint and coatings maker said, sending its stock sharply higher.
The proposed price equated to a 39% premium over AkzoNobel's most recent closing price of €52.52 a share. Following the rejection statement, the shares rose to €61 by 0813 GMT and were headed for what the company said would be their best trading day since October 2008.
In explaining its decision, AkzoNobel said the non-binding joint proposal undervalued its operations and lacked sufficient certainty on the regulatory approvals that would be required to complete such a transaction. The company also flagged that the structure put forward by the bidders would have divided AkzoNobel's businesses between the two suitors.
Under the terms set out in the proposal, Nippon Paint would acquire AkzoNobel and retain the decorative paints and industrial coatings operations, while Sherwin-Williams would purchase the automotive, marine and powder coatings divisions.
A company spokesperson said that neither proposal qualified as a "potentially superior" offer when compared with AkzoNobel's planned merger with U.S. coatings group Axalta.
AkzoNobel's board said it continues to support the proposed combination with Axalta. The companies expect the merged entity to have an enterprise value of $25 billion and to be led by AkzoNobel's CEO, Greg Poux-Guillaume. The initially planned structure calls for the combined company to be dual-listed in Amsterdam and New York.
The companies anticipate the transaction to close in late 2026 or early 2027 and project $600 million in annual cost savings within the first three years following completion.
Brokerage KBC noted that Akzo considers the Axalta merger proposal to be superior and is proceeding on that path.
For reference on currency conversion, the companies cited a rate of $1 = 0.8593 euros.
The decision leaves AkzoNobel pursuing the previously arranged merger with Axalta while declining the rival joint cash approach from Nippon Paint and Sherwin-Williams. Market reaction was immediate and positive for AkzoNobel shares, reflecting investor preference for the board's chosen strategic route.