01 September 2010 09:15 [Source: ICIS news]
LONDON (ICIS)--AkzoNobel said on Wednesday that it has been selected by Walmart to be the primary paint supplier for the retailer’s US stores in a deal analysts say may turn around its loss-making decorative activities.
The Dutch paints and coatings firm said it would develop and manufacture a portfolio of interior and exterior paints for more than 3,500 Walmart stores.
It added that the agreement builds on the existing relationship with Walmart, described by AkzoNobel as the world's largest retailer, for paints in Puerto Rico and ?xml:namespace>
"This is a landmark deal which will significantly boost our market share in the US and contribute to further enhancing the value of our Glidden brand there," said Tex Gunning, board member responsible for Decorative Paints.
Walmart will begin the transition to AkzoNobel early next year.
Dutch analysts SNS Securities said in a research note that the deal could be an important step for the company.
“The announcement of AkzoNobel becoming preferred supplier at Walmart’s US stores is another step in the process to become profitable at its currently loss-making US Deco activities,” the analysts said.
They added that “earlier, management stated that, once margin improvement is completed, ‘all strategic options for the
The company’s share price rose by 1.4% in early morning trading on Wednesday to hit €42.25 at 07:17 GMT.
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