Nippon Paint shares rise on $1.35 billion deal for Akzo’s Southeast Asia paint arm

Shares of Nippon Paint Holdings surged on Monday following the Japanese paintmaker's announcement that it would acquire AkzoNobel's decorative paints businesses across Southeast Asia, Australia, and Papua New Guinea for $1.35 billion. The move aimed to broaden Nippon Paint's regional presence in the market. The company's shares climbed by 1%, settling at 1,169 yen, although they trailed the broader Japanese Nikkei 225 index, which experienced a 2.28% increase.

The acquisition encompasses AkzoNobel's decorative paints operations in Vietnam, Indonesia, Malaysia, Thailand, Singapore, Papua New Guinea, and Australia, representing an enterprise value of approximately $1.35 billion. AkzoNobel valued the business at 21 times its 2025 EBITDA, while Nippon Paint calculated the purchase price at around 16 times the projected 2026 EBITDA.

The acquired businesses generated $291 million in revenue and $65 million in EBITDA during 2025, with an EBITDA margin of about 22%. Nippon Paint anticipates that the acquisition will be profitable once completed and anticipates cost-saving opportunities through joint procurement, manufacturing, logistics, cross-selling, and reduced overhead expenses.

The acquisition will be financed using cash and bank borrowings, minimizing immediate dilution for existing shareholders. However, the transaction for Indonesia is expected to conclude individually in late 2026, while the remaining deals are projected to be finalized by mid-2027, contingent upon regulatory approvals. This transaction represents a partial success for Nippon Paint, as the company had previously attempted to acquire AkzoNobel's entire decorative paints business, which AkzoNobel had previously rejected.

These earlier proposals valued the broader business at approximately €7.5 billion, a figure Nippon Paint and Sherwin-Williams had also abandoned during a joint pursuit of the entire AkzoNobel company earlier that year.