To defeat him, Mickey must spray Thinner at his arms until the arms are destroyed and he will talk to Mickey that his time is up and doesn't feel good.
If Mickey wants to befriend him, he shouldn't paint the arm completely. If he paints an arm, the arm will lose paint for a few seconds and Mickey will have to paint that arm in again. Mickey must paint only part of one arm, then paint the other arm fully. While that arm starts draining, Mickey can paint in the other arm.