Two paint industry giants announced Wednesday they are walking away from their collaborative bid to purchase Dutch paint manufacturer AkzoNobel, sending the target company’s stock into a steep decline.
AkzoNobel shares, which include the well-known Dulux paint brand, dropped more than 20% in morning trading after an initial trading halt, positioning the company for potentially its most devastating trading session on record.
“A lot of people may have thought that another offer from Sherwin-Williams and Nippon Paint would be forthcoming,” Berenberg analyst Sebastian Bray said.
The withdrawal comes after AkzoNobel turned down the partnership’s €12.5 billion ($14.5 billion) cash acquisition proposal the previous week, news that had initially boosted the Dutch firm’s stock value by 20%.
In a Wednesday statement, AkzoNobel confirmed that both of its governing boards continue to unanimously support the company’s proposed combination with U.S. coatings manufacturer Axalta.
“Ultimately the Axalta merger now appears the most likely outcome,” Bray said.
