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Axalta-Nippon Discussions End

Monday, December 4, 2017

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Less than two weeks after a potential deal between Axalta Coating Systems (Philadelphia) and Nippon Paint Holdings Co. Ltd. (Osaka, Japan) was first broached, talks have ended with no agreement.

Axalta made the announcement Thursday (Nov. 30).

Nippon Paint headquarters
tokumeigakarinoaoshima, CC0, via Wikimedia Commons

Nippon Paint (Osaka, Japan headquarters pictured) will not purchase Axalta Coating Systems.

For Nippon, the attempt to acquire Axalta was part of a move to expand into sales for automotive manufacturers, as well as increase its U.S. footprint.

Nippon Talks

In its talks with Axalta, Nippon made an all-cash bid that totaled $9.1 billion. The failed talks came on the heels of AkzoNobel’s recent bid to acquire the company, which also fell through.

“While neither deal came to fruition, the keen interest by these companies underscores Axalta’s global leadership position,” Axalta CEO Charles Shaver said in a statement. “We are well positioned to continue as a standalone growth company and will remain disciplined in generating superior long-term value for our shareholders.”

According to Axalta, Nippon Paint’s Board of Directors was unwilling to meet Axalta’s expectations in regard to company value.

Axalta

On Thursday, global coatings manufacturer Axalta Coating Systems ended talks with Japan-based Nippon Paint Holdings Co. Ltd., resulting in the failure of the potential sale.

“I would like to thank our customers, investors, suppliers and employees for their patience and support as we have considered these strategic options. We look forward to continuing the performance you have come to expect of our company,” Shaver concluded.

Prior Discussions

Earlier last month (Nov. 22), Axalta released a statement announcing that the company had engaged in talks with Nippon.

“Axalta today confirmed that it is engaged in discussions with Nippon Paint regarding a potential acquisition of Axalta,” the statement read. “Axalta will pursue such a transaction only if its Board of Directors determines that it is in the best interest of Axalta to do so. There can be no assurances that a definitive agreement between the parties will be reached or on what terms.”

Nippon did not release its own statement, but Reuters reported that “two people familiar with the matter” confirmed that the company made the all-cash offer to acquire Axalta.

On the previous day, Nov. 21, both AkzoNobel and Axalta released statements indicating that their merger talks—which were announced at the end of October—had ended, with just minimal statements from each company.

That potential merger would have involved Axalta merging with AkzoNobel’s Paints and Coatings business; the financial terms of the offer were not disclosed..

“After pursuing a potential combination of Axalta and Akzo, we concluded we could not negotiate a transaction on terms that meet our criteria,” said Shaver. “Any transaction we ultimately agree to needs to generate superior long-term value for Axalta shareholders as compared to the continued execution of our strategic plan.”

   

Tagged categories: Acquisitions; AkzoNobel; Axalta; Finance; Mergers; Nippon Paint

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