Nippon Paint shopping for big acquisitions, including in Europe

[TOKYO] Nippon Paint Holdings is shopping for large acquisitions, including in Europe, to expand outside Japan amid a global consolidation among the biggest coatings makers.

"While our expansion is centered on China and other Asian countries in line with our mid-term plan, we also aim to expand through M&A in Europe and the United States," Nippon Paint President Tetsushi Tadoh said, according to Yukiko Mochida, a spokeswoman for the company. Mr Tadoh's comments were published earlier Tuesday in the Nikkei newspaper.

Mr Tadoh's confirmation that the Osaka-based paint maker is looking to grow through acquisition comes about a month after its offer for Axalta Coating Systems, the world's largest maker of coatings for cars, failed to produce a deal. Philadelphia-based Axalta, with a market value of about US$8 billion, said on Dec 15 it hopes to be a major player in the industry's consolidation and is open to mergers and acquisitions.

Nippon Paint had about 77 billion yen (S$914.31 million) in net cash as of Sept 30, according to data compiled by Bloomberg. Cash, equivalents and short-term investments stood at about 135 billion yen.

The company's shares, which fell 13 per cent last month, rose 0.1 per cent to 3,650 yen as of the 11.30 am break in Tokyo trading.

Talks on the Axalta acquisition ended without an agreement because Nippon Paint couldn't clarify some terms of the deal by the deadline set by both companies, Mr Tadoh said, according to Mochida. The US-based coatings maker said at the time that Nippon Paint was unwilling to value Axalta highly enough.

Axalta chief executive officer Charles Shaver had been unable to seal deals with two separate companies last month amid rising raw-materials costs that are pressuring paintmakers' profit margins. Talks to combine with Amsterdam-based Akzo Nobel, the world's third-largest coatings company, fell apart as Nippon Paint emerged as a suitor. Axalta's biggest shareholder is billionaire Warren Buffett's Berkshire Hathaway.

BLOOMBERG