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Axalta in Talks to Be Acquired by Nippon Paint After Akzo Discussions Fail

"Axalta Coating Systems confirmed early Wednesday that it is in talks about a possible takeover by Japan's Nippon Paint Holdings Co.," reports the Wall Street Journal (Nov. 22, Dummett), "in a deal that would likely exceed $8.25 billion." The move comes after merger talks with Amsterdam-based rival Akzo Nobel fell apart. Nippon's cash bid prompted Philadelphia-based Axalta to walk away from Akzo, according to one Journal source. The U.S. company currently boasts a market value of $8.25 billion. Any offer would almost certainly include a premium. "Nippon's efforts and those of Akzo to join forces with Axalta are part of a broader consolidation trend in the chemicals industry as companies seek avenues for growth and cost savings," notes the newspaper.

ABC News (Nov. 22) is reporting that AkzoNobel announced Wednesday that it would focus on increasing profitability independently moving forward. Chief Executive Thierry Vanlancker remarked that he is "confident that our strategy offers significant value for shareholders." Earlier in the year, AkzoNobel rejected repeated takeover bids by U.S. rival PPG Industries Inc., with the last worth a reported $28.8 billion.

Bloomberg (Nov. 22, Matsuda, Noel) notes that the collapse of the Akzo Nobel-Axalta discussions marks the latest twist in a wave of dealmaking in the chemical industry. Akzo shareholders have been putting pressure on company management for most of this year after rebuffing PPG Industries Inc. and waging a battle against activist investor Elliott Management Corp. "Adding to the squeeze," Bloomberg notes, "Akzo Nobel has seen U.S. rival Sherwin-William