TOKYO -- Japan's Nippon Paint Holdings said on Friday that it has ended talks with Axalta Coating Systems, abandoning plans to take over the American company.
Nippon Paint's board met late Thursday night and decided to call off the buyout talks, which centered on making Axalta a fully owned subsidiary.
Talks collapsed due to disagreement over terms of the acquisition, the company said.
"Following careful examination of the circumstances surrounding both companies [Nippon Paint has] decided not to pursue the transaction," the company said in a statement released on Friday.
Axalta also said it has ended the talks.
Nippon Paint had planned to finance the acquisition, estimated at over 1 trillion yen ($8.91 billion), primarily with bank loans. The company apparently abandoned the plan for fear of significantly eroding its finances as well as squeezing its investment capacity.
Axalta said on Nov. 21 that it had called off merger talks with Netherlands-based Akzo Nobel, the world's leading coatings company.
After Nippon Paint offered to buy Axalta, the American company's market capitalization briefly topped $9 billion.
Nippon Paint shares had plunged 7% since it announced its tender for Axalta. But following the break-off of talks, its price jumped in Friday morning trading on the Tokyo Stock Exchange, at one point up around 11% from Thursday's close.
According to one analyst, "Investors like the breakup because they had been concerned about possible deterioration in the company's finances if the mega takeover materialized."