AkzoNobel to Sell Southeast Asia Decorative Paints Business for $1.35 Billion

AkzoNobel has agreed to sell its Southeast Asian decorative paints business to Nippon Paint for $1.35 billion, concluding a regional portfolio review.

The agreement concludes a strategic review of its Asian decorative paints portfolio, marking a pivotal step for the Dutch multinational producer of paints and coatings. Nippon Paint Holdings is funding the purchase through bank borrowings and existing cash rather than issuing new shares. For the Japanese buyer, the purchase follows two unsuccessful attempts this year to secure a broader agreement with the Dutch firm.

Territories Covered in the $1.35 Billion Purchase

The cross-border transaction spans seven distinct jurisdictions and legal structures. Nippon Paint Singapore is acquiring subsidiaries in Vietnam and Singapore, while Nippon Paint (Malaysia) takes over the Malaysian operations. In Indonesia, Nippon Paint (H.K.) Co. is purchasing 100% of AkzoNobel’s joint venture from the parent company and its local partner. The Thai business transfers directly to Nippon Paint Decorative Coatings (Thailand), and operations in Australia and Papua New Guinea shift to DuluxGroup. Financing will come from Nippon Paint’s existing cash reserves and a committed credit facility arranged through Mizuho Bank and Sumitomo Mitsui Banking Corporation.

Photo: WSJ

Regulatory timelines and closing dates differ across the regional footprint. While the majority of the portfolio transactions are slated to close around mid-2027, the Indonesia business is expected to be completed separately in late 2026. The deal remains subject to regulatory clearance in each respective jurisdiction.

Financial Metrics and Valuation Multiples

The target units generated combined revenues of $291 million in 2025, down from $299 million in 2024. Earnings before interest, taxes, depreciation, and amortization stood at $65 million last year, compared with $69 million in the preceding year, yielding EBITDA margins of 22% in 2025 and 23% in 2024.

Valuation figures vary by perspective. Akzo values the transaction at 21 times 2025 EBITDA, whereas Nippon Paint calculates the multiple at roughly 16 times projected 2026 EBITDA. By comparison, Nippon Paint’s earlier, rejected proposal for Akzo’s entire global decorative paints division implied a multiple of approximately 11.5 times 2025 EBITDA. AkzoNobel anticipates approximately $1 billion in net cash proceeds after accounting for taxes and payments to minority partners.

Photo: Yahoo Finance Singapore

Nippon Paint Expects Operational Efficiency and Market Synergies

“By facilitating collaboration across the Group’s procurement, manufacturing, logistics, and sales functions through this transaction, the Company expects to enhance operational efficiency and generate synergies,” said Nippon Paint.

Nippon Paint

Nippon Paint projects that integration benefits will yield annual savings in high-single-digit percentages of sales, driven by joint procurement, production rationalization, cross-selling, and reduced overhead costs. The combined entity will control an estimated 34 per cent of the decorative paints market across the six core countries, based on volume sales data compiled by industry research firm Kusumgar, Nerlfi & Growney.

Broader Corporate Portfolio Realignment

The divestiture follows earlier sales of AkzoNobel’s decorative paints operations in India and Pakistan for $1.6 billion and €50 million, respectively. Chief Executive Greg Poux-Guillaume noted that shedding these peripheral assets advances the company’s objective to focus capital on areas with differentiating scale.

“The successful completion of our Asia portfolio review is part of an ongoing strategy to focus our portfolio on areas where we can achieve differentiating scale and strengthen our position,”

Greg Poux-Guillaume, Chief Executive, AkzoNobel

AkzoNobel will now concentrate on closing its merger with Axalta Coating Systems, a combination approved by shareholders in August to create a New York-listed paints and coatings group with dual headquarters in Amsterdam and Philadelphia and annual revenue of approximately $17 billion.