AkzoNobel rejects joint $14.53B takeover bid from Nippon Paint and Sherwin-Williams

AkzoNobel has rejected a joint 12.49 billion-euro ($14.53 billion) all-cash takeover proposal from Japan’s Nippon Paint Holdings and U.S.-based The Sherwin-Williams Company (NYSE:SHW), choosing instead to advance its previously agreed-upon merger with Axalta Coating Systems.

The non-binding proposal, which was submitted on April 29 and rejected by the Dutch company on May 1, was publicly confirmed by the bidding consortium on Wednesday.

The indicator price of 73 euros per share represented a 39 percent premium over AkzoNobel’s baseline price, prompting the Amsterdam-listed company's shares to surge as much as 17 percent in early European trading.

Under the terms of the rejected joint proposal, the suitors planned a structural split of AkzoNobel's global business units upon completion.

Nippon Paint would have spearheaded the all-cash public tender offer and retained the core decorative paints and industrial coatings operations.

Concurrently, Sherwin-Williams was slated to separately acquire the automotive and specialty coatings, marine and protective coatings, and powder coatings divisions.

The proposal carried no financing conditions and did not require the approval of Sherwin-Williams or Nippon Paint shareholders.

AkzoNobel’s management and supervisory boards concluded that the joint offer undervalued the company’s long-term prospects and failed to qualify as a superior proposal under its existing obligations.

The boards highlighted significant execution risks, citing a lack of structural certainty regarding regulatory clearances and the complexities involved in breaking up the underlying operations across two distinct corporate buyers.