AkzoNobel has reached an agreement to sell its south-east Asian decorative paints business to Japanese competitor Nippon Paint for $1.35 billion, marking a strategic divestment as the Dutch company focuses on core markets and a major merger. The transaction, announced by Nippon Paint on Tuesday, includes AkzoNobel’s decorative paints operations under the Dulux brand in Vietnam, Indonesia, Malaysia, Thailand, and Singapore. Nippon already controls the Dulux brand in Australia and New Zealand, further expanding its presence in the Asia-Pacific region.
This sale follows a commitment by AkzoNobel CEO Grégoire Poux-Guillaume to exit peripheral markets in south-east Asia where the company does not hold a leading position. The divestment is separate from but complementary to AkzoNobel’s ongoing merger with U.S.-based Axalta Coating Systems, which was announced in November last year and aims to establish a combined company valued at approximately $25 billion. The merger, approved by shareholders in August, will result in a New York-listed entity with dual headquarters in Amsterdam and Philadelphia, and is projected to generate annual revenues around $17 billion.
Nippon Paint, which had previously pursued larger deals to acquire AkzoNobel’s entire decorative paints segment, has in recent months backed away from broader takeover proposals. These earlier efforts included a €7.5 billion bid in July for the full decorative paints business and a €13 billion offer in May, jointly made with American company Sherwin-Williams, for a complete takeover of AkzoNobel. While Nippon remains interested in acquiring more of AkzoNobel’s decorative paints operations, sources close to the matter indicate that integrating the south-east Asian unit alone could keep the company occupied for an extended period. AkzoNobel, meanwhile, reportedly has no plans to sell additional parts of its decorative paints business.
The transaction is expected to close by mid-2027, according to Nippon Paint’s announcement. This sale complements AkzoNobel’s strategic asset optimization, which includes last year’s agreement to sell its Indian paint business to JSW Group for about €1.4 billion as part of the company’s effort to divest non-core assets ahead of the Axalta merger.
The combined AkzoNobel-Axalta group is expected to realize approximately $600 million in cost savings within three years of completing their merger, positioning the new company as one of the world’s largest players in the coatings industry.