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Japan’s Nippon Paint has submitted an all-cash takeover offer for rival Axalta Coatings System, prompting the US company to break off merger discussions with Akzo Nobel.

The offer marks a rare intervention by a Japanese company into what were otherwise friendly discussions between Axalta and Akzo Nobel, a Dutch paints and coatings company. Reuters first reported Nippon Paint’s intervention.

According to two people close to the situation, Nippon Paint made the offer, which values Axalta at a premium to its current share price, early on Wednesday. Nippon Paint may make a statement later on Wednesday to confirm the offer.

Akzo Nobel and its US rival Axalta confirmed they had ended discussions over a possible combination that first became public in October. Their talks came just months after Akzo fended off an unwanted €27bn takeover approach from PPG Industries, a larger US competitor.

A deal between Akzo and Axalta would have brought together the third and fourth-largest companies in the $130bn global coatings market, according to analysts.

Akzo and Axalta were discussing a stock deal that was framed as a “merger of equals” and that would have valued Axalta at a low premium, people involved in those talks previously said.

Nippon Paint has a market capitalisation of $10.7bn. The Japanese company’s shares were 2.4 per cent lower on Wednesday morning.

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