Declining growth rate in paint industry a case for consolidation -Jefferies

Kansai Paint

06/08/2019 14:11

** Pricing power of light vehicle paint suppliers would
become stronger if two of the top five co's, PPG  PPG.N , Axalta
 AXTA.N , BASF  BASFn.DE , Kansai 4613.T  and Nippon Paint
 4612.T , were to consolidate -Jefferies 
    ** Brokerage says expected growth rate of OEM paint market
has been declining, increasing the drive toward consolidation;
estimates global market for light vehicle OEM paint to be about
$7-$8 bln
    ** Says while technology is important in auto OEM paint
industry, so is the ability to supply the same products globally
    ** Brokerage see a 40-50% chance Kansai would acquire
Axalta, says only Kansai and PPG seem interested among the
strategic buyers
    ** Warren Buffett's Berkshire Hathaway Inc  BRKa.N  is the
largest shareholder of Axalta Coating Systems
    ** AXTA shares up 20% YTD, PPG up ~8.5%
    
  

 (Reporting by Shradha Singh in Bengaluru)
 ((Shradha.Singh@thomsonreuters.com; within U.S. +1 646 223 8780
Ext: 2439, outside U.S. +91 80 6749 2439))