Nippon Paint shares rose on Monday 5 October after the Japanese paintmaker agreed to buy AkzoNobel’s Southeast Asia decorative paints business for 1.35 billion dollars.
Taken alone, that is a modest transaction. Taken as the third item in a sequence, it is something closer to a lesson.
In the spring of 2026, Nippon Paint approached AkzoNobel alongside Sherwin-Williams with a proposal to buy the entire Dutch group, valued at 12.5 billion euros. AkzoNobel rejected it in May and reaffirmed its commitment to the all-share merger of equals it had agreed with Axalta the previous November. By June, the consortium confirmed it was no longer pursuing the bid.
In July, Nippon Paint came back alone with a narrower target: the whole Decorative Paints division, at 7.5 billion euros. AkzoNobel rejected that too, on two grounds. The merger agreement with Axalta restricted it from engaging with alternative proposals at all, and in the company’s own words the offer significantly undervalued the business, as it had already told Nippon Paint.
In October, Nippon Paint bought the part of that division that was actually for sale. AkzoNobel’s chief executive had said in April that the company was considering divesting certain Southeast Asian decorative paint businesses, and Goldman Sachs had been appointed to run the process.
Three approaches, each one smaller than the last, ending with the one that fit.
There is a way of reading this as defeat, and it is the reading most coverage will take, because the first number was 12.5 billion euros and the last number was 1.35 billion dollars. It is worth arguing the other way.
The first two bids were attempts to buy something whose owner had publicly, repeatedly and contractually committed to a different future. No price solves that, because the obstacle was never price. The third bid was for an asset the seller had already decided to sell, in a region the buyer actually wants, through a banker instructed to find exactly this buyer. The ASEAN coatings market is forecast to grow from about 7.78 billion dollars in 2026 to 9.92 billion by 2031, which is the sort of growth rate that makes a regional foothold worth more than its revenue line suggests.
Every operator who has ever tried to buy a site knows the shape of this. You want the corner unit on the busy street. You offer, the landlord says no, you offer more, the landlord says no again, and the honest conclusion is that the building is not available at any price you can justify, because the owner’s plan does not include selling. Then a smaller unit comes up two doors down, from a seller who wants out, and it turns out to be a better trade than the one you spent six months chasing.
The discipline is in distinguishing between a seller who wants more money and a seller who does not want to sell. The first is a negotiation. The second is a different search.
Nippon Paint spent half a year finding out which it was dealing with, and then wrote a cheque for the thing that was genuinely on the market.
The shares went up on the small one.
Source: Investing.com, “Nippon Paint shares rise on $1.35 billion deal for Akzo’s Southeast Asia paint arm”
