On Friday, shares in Axalta, a US paint maker, grew as much as 22pc after rumours that Akzo Nobel had addressed it over a possible merger has swirled.
Reuters said that Axalta is reported to be in the early stages of contemplating a tie-up with the Dulux owner, with no assurance that the pair will arrive in agreement.
Spokespersons for both Akzo and Axalta said that they did not reply to or comment on market speculation.
Should the deal go forward, Michael Harrison, a Seaport Global analyst, said that the offer of Akzo for Axalta could be about $40 per share, based on a similar deal within the industry earlier in 2017. This would estimate it at over $9.7bn (£7.4bn).
On the reports, Axalta rose as much as 22pc, and shares were up 17pc at $33.15.
Discussions regarding a tie-up come after Akzo rejected three takeover approach from PPG Industries earlier this year, causing shareholder unrest and leading to calls from Elliott Advisors, an activist investor, for chairman Antony Burgmans to be removed from his post.
Akzo had argued that the £23bn bid of PPG “undervalued” the company and “demonstrated a lack of cultural understanding.”
Since taking on the role of CEO in July, a takeover of Axalta would be the first acquisition that Thierry Vanlacker has made after Ton Büchner stepped down due to health reasons.
An analyst at Robert W Baird & Co, Ghansham Panjabi, however, said that the move would be “logical” as the industry is consolidating rapidly.
Currently, Akzo is also shifting away from its chemicals operations, with plans to sell the said arm by April 2018 and focus more on coatings instead.