AkzoNobel and Axalta are moving closer to securing European Union approval for their proposed $25 billion merger, with the sale of AkzoNobel’s vehicle refinishing business expected to address the remaining competition concerns.
AkzoNobel NV and Axalta Coating Systems Ltd. are approaching a potential regulatory breakthrough in their proposed $25 billion merger, with a planned asset sale expected to resolve outstanding European Union competition concerns. The European Commission is expected to grant conditional approval after the companies submit a formal proposal addressing the remaining antitrust issues.
The proposed divestiture involves AkzoNobel’s vehicle refinishing business, which has emerged as the principal outstanding concern in the Commission’s review. The companies met with EU competition officials on Wednesday, October 7, to discuss possible remedies and are expected to submit a formal proposal. The submission is expected to extend the Commission’s existing October 22 decision deadline by 10 working days, allowing regulators additional time to evaluate whether the proposed measures adequately address competition risks.
The merger, announced in November 2025, would combine two major international coatings manufacturers in a transaction intended to expand their global reach, strengthen their market positions and generate operating efficiencies.
Proposed Divestiture Addresses Remaining Antitrust Concerns
The European Commission’s review has focused on areas where the companies’ overlapping operations could affect competition. Concerns relating to their powder coatings businesses have reportedly been resolved, leaving vehicle refinishing as the principal outstanding issue.
The proposed sale of AkzoNobel’s vehicle refinishing operations is intended to address this concern without requiring broader changes to the merger. The effectiveness of the proposed remedy will depend on the Commission’s assessment of its impact on competition in the relevant markets.
Conditional approval would represent a significant step towards completing the transaction, but it would not, by itself, mean that the merger had received all necessary authorisations. The companies must still satisfy the applicable regulatory requirements and other closing conditions.
Merger Would Create a Major Global Coatings Business
The proposed combination brings together two companies with complementary portfolios across decorative paints, industrial coatings and specialised coating solutions. AkzoNobel, headquartered in the Netherlands, operates across decorative paints and performance coatings, with brands including Dulux. Axalta, based in the United States, specialises in coatings for transportation, industrial applications and other markets, including automotive refinishing.
When the merger was announced on November 18, 2025, the companies said the combined business would have an enterprise value of approximately $25 billion and annual revenue of about $17 billion, based on 2024 figures. They also identified approximately $600 million in expected annual cost synergies, with 90% targeted for realisation within the first three years after completion.
The companies said the transaction would expand their geographic reach, bring together their technology and research capabilities, and create a broader platform for serving customers across end markets. The proposed business would have operations spanning more than 160 countries.
The transaction is structured as an all-stock merger of equals. Under the announced terms, Axalta shareholders would receive 0.6539 shares of AkzoNobel for each Axalta share held. Following completion, the combined company is intended to be domiciled in the Netherlands, with dual headquarters in Amsterdam and Philadelphia and a single listing on the New York Stock Exchange after a period of dual listing.
Looking Ahead
The proposed merger comes as coatings manufacturers seek greater operating efficiency, wider geographic coverage and stronger positions across industrial and consumer markets. Consolidation can provide opportunities to combine research capabilities, streamline operations and improve scale, although the benefits depend on successful integration and the realisation of projected savings.
The regulatory review remains a key milestone for AkzoNobel and Axalta. The proposed vehicle refinishing divestiture could help clear the way for the transaction, but its final terms and the Commission’s response remain subject to the formal review process.
The companies have previously indicated that they expect to complete the merger between late 2026 and early 2027, subject to regulatory approvals, shareholder requirements and other closing conditions.
Source: Reuters; AkzoNobel
