AkzoNobel sells South-east Asian paints business to Nippon Paint for $1.35bn

AkzoNobel has agreed to sell its South-east Asian decorative paints business to Nippon Paint for $1.35 billion, wrapping up a strategic review of its operations in the region.

The Amsterdam-listed company expects to pocket about $1 billion in net cash after taxes and payouts to minority partners. The transaction is a sweeping one, covering AkzoNobel's decorative coatings operations in Vietnam, Indonesia, Malaysia, Thailand, Singapore, Papua New Guinea and Australia.

It marks the latest step in a major retreat from the region's consumer markets for the Dutch company, best known as the manufacturer of Dulux paint. AkzoNobel has already offloaded its decorative paint businesses in India for $1.6 billion and Pakistan for €50 million.

Greg Poux-Guillaume, AkzoNobel's chief executive, said the completion of the Asian review was part of an ongoing strategy to sharpen the company's focus. "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," he said in a statement.

Timeline and integration

The handover will not happen overnight. The Indonesian arm of the business is expected to close as a separate deal in late 2026, with the remaining countries following around mid-2027.

Now that the Asian sale is agreed, AkzoNobel said it will focus on completing its merger with Axalta, the US coatings manufacturer. That tie-up was announced in November last year.

Nippon's long-term ambitions

For Nippon Paint, the acquisition represents a hard-fought victory. The Japanese firm has spent months pursuing AkzoNobel's assets. In July, AkzoNobel revealed that Nippon Paint had made several unsolicited approaches for its decorative paints division, offering about €7.5 billion ($8.44 billion). Just a month earlier, Nippon Paint had teamed up with US rival Sherwin-Williams on an ambitious €12.5 billion bid for the entirety of AkzoNobel, before withdrawing the proposal.

While the Financial Times reported that Nippon Paint is still interested in buying more of AkzoNobel's decorative paint business, any larger deal is likely on hold. Integrating the South-east Asian business is expected to occupy the Japanese group's management for some time, and AkzoNobel has stated it does not plan to sell any further assets.