Top of the Morning
Akzo Nobel (Amsterdam: AKZA) reportedly is in talks to merge with smaller U.S. rival Axalta Coating Systems (NYSE: AXTA), to create a paints and coatings giant worth around $30 billion.
- Why it's the BFD: Because this looks like a high-priced case of offense being the best defense, as Akzo Nobel earlier this year rebuffed repeated takeover offers from PPG Industries (NYSE: PPG).
- Related: Akzo Nobel continues the sale process for its specialty chemicals business, with first-round bids expected by year-end. It's unclear how that prospective deal – which has drawn strong private equity interest – will be impacted by last week's collapse of the Clariant/Huntsman Corp. merger due to activist investor opposition.
- Bottom line: "The U.S. coatings manufacturer is the 'ideal poison pill' that would make Akzo Nobel 'undigestable' for PPG, ING analyst Stijn Demeester said in a note, adding that any deal would have to overcome some hurdles in the companies' valuations. – Bloomberg
Venture Capital Deals
Private Equity Deals
• 9 companies are expected to price IPOs on U.S. exchanges this week: ACM Research, Allena Pharmaceuticals, Altair Engineering, Aquantia, Evoqua Water Technologies, Funko, Loma Negra, Sentinel Energy Services and Spero Therapeutics. http://axios.link/V11x
• Cardlytics, an Atlanta-based marketing analytics company, has filed confidentially for an IPO, according to TechCrunch. The company has raised over $180 million in VC funding from firms like Polaris Partners, Canaan Partners, Discovery Capital, TTV Capital, ITC Holdings, Total Technology Ventures and Kinetic Ventures. http://axios.link/df04
• Four Seasons Education, a Shanghai-based provider of after-school math tutoring, has set its IPO terms to 10.1 million shares being offered at $9 to $11. It would have a fully-diluted market value of $524 million, were it to price in the middle. The company plans to trade on the NYSE under ticker symbol FEDU, with Morgan Stanley listed as left lead underwriter.
• Sogou, a Chinese mobile search engine being spun out of Sohu.com (Nasdaq: SOHU), set its IPO terms to 45 million shares being offered at $11 to $13. It would have a fully-diluted market value of around $4.8 billion, were it to price in the middle. The company plans to trade on the NYSE under ticker symbol SOGO, with J.P. Morgan listed as left lead underwriter. http://axios.link/wwYq
• Continental AG of Germany reportedly is in advanced talks to buy Argus Cyber Security, an Israeli developer of technology to prevent connected cars from being hacked, for around $400 million. Argus has raised around $30 million in VC funding from firms like Magma Venture Partners, Vertex Ventures Israel, SBI Holdings and Allianz Ventures. http://axios.link/PDqL
• Owens Corning (NYSE: OC) has agreed to acquire Paroc Group, a Finland-based maker of mineral wool insulation products, from CVC Capital Partners for around €900 million. http://axios.link/DSjO
🚑 Shanghai Fosun Pharmaceutical has agreed to acquire French drug distributor Tridem Pharma for €63 million. Sellers would include Paluel-Marmont Capital and Multicroissance. http://axios.link/aIly
• Warburg Pincus has hired UBS to find a buyer for its 31.5% stake in India's Gangavaram Port, according to DealStreetAsia. The deal could be worth between $300 million and $400 million, with DP World, Adani Ports and JSW Infrastructure reported to have buyside interest. http://axios.link/OB2U
• SL Capital has closed its third private equity secondaries fund with $428 million in capital commitments. www.slcapital.com
- Why it matters, per Axios' Ben Geman: This data is ammunition for those who say the Trump Administration should avoid policies — like new tariffs on solar panel imports — that would undercut sectors that are poised to become even larger parts of the U.S. economy.