Dutch paintmaker Akzo Nobel NV is considering a merger of equals with US rival Axalta Coating Systems Ltd, a deal that would combine two companies with a market value of about US$30 billion.
The Amsterdam-based company is “currently in constructive discussions” regarding a merger with Axalta, the world’s largest maker of auto refinish paints, Akzo Nobel said in a statement yesterday.
A deal would create a leading global paints and coatings company, it said.
The separation of Akzo’s Specialty Chemicals business, including the return of the vast majority of net proceeds to shareholders, remains on track for April next year and is unaffected by the merger discussions, Akzo Nobel said.
Akzo Nobel is looking to pay close to no premium in any deal, a person familiar with the matter said over the weekend.
Axalta, of which Warren Buffett’s Berkshire Hathaway Inc is the largest shareholder, on Friday soared 17 percent in New York after Reuters first reported the talks, valuing the company at about US$8.1 billion.
The Dutch competitor, led by chief executive Thierry Vanlancker, has a market value of almost 20 billion euros (US$23.3 billion) after shares climbed 30 percent this year.
Akzo Nobel has come under shareholder pressure this year after rebuffing an unsolicited US$29 billion buyout offer from rival PPG Industries Inc and battling activist investor Elliott Management Corp.
PPG can renew its bid for Akzo Nobel in December under Dutch takeover rules. The Dutch paintmaker, which plans to separate its chemical division to tighten its focus on coatings, abandoned a target last month for this year’s profit growth after third-quarter earnings missed estimates.
“The timing suggests the Akzo Nobel board wants to block off any possibility of losing its independence,” Jefferies LLC analyst Laurence Alexander said in a note.
Meanwhile, Axalta has posted two straight quarters of profit declines amid rising costs for paint ingredients.
The company, formerly a unit of DuPont, would complement Akzo’s product lines, Seaport Global Securities analyst Michael Harrison said in a note.
Axalta could sell for US$40 a share, based on the 15-times earnings multiple paid by Sherwin-Williams Co for Valspar Corp earlier this year, he said.
A tie-up between Axalta and Akzo is “logical” given the rapidly consolidating coatings industry, Robert W. Baird & Co analyst Ghansham Panjabi said in a note.
He said he saw Axalta potentially selling for more than US$40 a share, noting that it is the last medium-sized asset left in the industry.
DIVIDED VIEWS: Although the Fed agreed on holding rates steady, some officials see no rate cuts for this year, while 10 policymakers foresee two or more cuts There are a lot of unknowns about the outlook for the economy and interest rates, but US Federal Reserve Chair Jerome Powell signaled at least one thing seems certain: Higher prices are coming. Fed policymakers voted unanimously to hold interest rates steady at a range of 4.25 percent to 4.50 percent for a fourth straight meeting on Wednesday, as they await clarity on whether tariffs would leave a one-time or more lasting mark on inflation. Powell said it is still unclear how much of the bill would fall on the shoulders of consumers, but he expects to learn more about tariffs
Meta Platforms Inc offered US$100 million bonuses to OpenAI employees in an unsuccessful bid to poach the ChatGPT maker’s talent and strengthen its own generative artificial intelligence (AI) teams, OpenAI CEO Sam Altman has said. Facebook’s parent company — a competitor of OpenAI — also offered “giant” annual salaries exceeding US$100 million to OpenAI staffers, Altman said in an interview on the Uncapped with Jack Altman podcast released on Tuesday. “It is crazy,” Sam Altman told his brother Jack in the interview. “I’m really happy that at least so far none of our best people have decided to take them
PLANS: MSI is also planning to upgrade its service center in the Netherlands Micro-Star International Co (MSI, 微星) yesterday said it plans to set up a server assembly line at its Poland service center this year at the earliest. The computer and peripherals manufacturer expects that the new server assembly line would shorten transportation times in shipments to European countries, a company spokesperson told the Taipei Times by telephone. MSI manufactures motherboards, graphics cards, notebook computers, servers, optical storage devices and communication devices. The company operates plants in Taiwan and China, and runs a global network of service centers. The company is also considering upgrading its service center in the Netherlands into a
NOT JUSTIFIED: The bank’s governor said there would only be a rate cut if inflation falls below 1.5% and economic conditions deteriorate, which have not been detected The central bank yesterday kept its key interest rates unchanged for a fifth consecutive quarter, aligning with market expectations, while slightly lowering its inflation outlook amid signs of cooling price pressures. The move came after the US Federal Reserve held rates steady overnight, despite pressure from US President Donald Trump to cut borrowing costs. Central bank board members unanimously voted to maintain the discount rate at 2 percent, the secured loan rate at 2.375 percent and the overnight lending rate at 4.25 percent. “We consider the policy decision appropriate, although it suggests tightening leaning after factoring in slackening inflation and stable GDP growth,”
RSS