Akzo sells SE Asia paints to Nippon for $1.35bn

Akzo Nobel has agreed to sell its Southeast Asia decorative paints business to Nippon Paint Holdings for $1.35 billion. The sale covers decorative paints operations in seven countries in the region and represents a regional carve-out of part of Akzo’s decorative coatings portfolio. The companies expect the transaction to be completed by mid-2027 and indicate that it will be accretive to profits once fully finalized.

The business being divested focuses on decorative coatings for residential and commercial customers in Southeast Asia. The transaction provides Akzo with a way to streamline its portfolio while allowing Nippon Paint to strengthen its regional presence in a key growth market for coatings and paints.

A presentation by Nippon Paint shows that the Southeast Asia decorative paints operations generated $291 million in revenue and $65 million in earnings before interest, taxes, depreciation and amortization in 2025. These figures frame the size and profitability profile of the business being transferred. The deal value implies a significant monetization of these earnings for Akzo, while giving Nippon additional scale in the region.

Akzo values the transaction at about 21 times 2025 EBITDA, highlighting a multiple based on the 2025 earnings contribution of the unit. Nippon Paint, by contrast, describes the valuation as about 16 times projected 2026 EBITDA, using its own forward-looking estimates. The difference underscores how each party is framing the economics of the deal around different earnings bases and timelines.

Akzo expects to receive about $1 billion in net cash proceeds from the transaction after taxes and payments to minority partners. The company has not detailed specific uses of these funds within the articles provided, but the inflow represents a sizeable addition to its financial resources following completion of the sale. The transaction is structured as a multi-country divestment that will close in stages up to the targeted mid-2027 completion date.

Both companies state that the sale is expected to be accretive to profits once completed. For Akzo, this reflects the financial impact of the proceeds and portfolio changes, while for Nippon Paint it reflects the integration of the Southeast Asia operations into its broader network. The staged completion suggests that integration and transition will occur over several years.

Akzo is in the process of merging with Axalta Coating Systems (AXTA), and the sale of the Southeast Asia decorative paints business occurs alongside that broader strategic move. The divestment narrows Akzo’s direct exposure to decorative coatings in Southeast Asia at the same time as it pursues a combination with another major coatings company. The interaction between these transactions signals an active reshaping of Akzo’s portfolio and business mix.

For Nippon Paint, the acquisition follows an earlier effort to buy Akzo’s entire residential and commercial paints unit at an implied valuation of about €7.5 billion. That larger transaction did not materialize, and the current deal instead secures a regional slice of the decorative paints business. The acquisition gives Nippon a defined platform in Southeast Asia with established revenue and EBITDA, valued through differing but clearly stated earnings multiples.