AkzoNobel NV and Axalta Coating Systems Ltd. announced a merger that will create a combined company with an enterprise value of about $25 billion, including debt. The transaction is structured as a share‑swap: each Axalta share will receive 0.6539 AkzoNobel shares, giving AkzoNobel shareholders 55 % of the new entity and Axalta shareholders 45 %. The deal is expected to close in late 2026 to early 2027, subject to regulatory and shareholder approvals, and both companies will suspend their existing share‑repurchase programs until the transaction is completed.
AkzoNobel’s portfolio spans decorative paints, aerospace, marine and powder coatings, while Axalta brings automotive refinish, light‑vehicle OEM and industrial coatings expertise. Together they will serve more than 160 countries, positioning the combined company as a leading provider of high‑performance coatings for automotive, industrial and specialty markets. The merger is framed as a response to tariff pressures and a slowing global economy, with the goal of leveraging scale, reducing costs and accelerating innovation. Management projects run‑rate synergies of roughly $600 million, with 90 % expected within the first three years, and anticipates EBITDA margins approaching 20 % on pro‑forma 2024 revenue of about $17 billion.
Prior to the merger, AkzoNobel reported 2024 revenue of $10.5 billion and an EBITDA margin of 20 %, while Axalta posted $6.5 billion in revenue and an 18 % EBITDA margin. The combined pro‑forma 2024 revenue of $17 billion and an adjusted free cash flow of $1.5 billion underscore the financial strength of the new entity. The $600 million in synergies represents a significant portion of the combined company’s operating income, reinforcing the strategic rationale for the deal.
Greg Poux‑Guillaume, AkzoNobel’s CEO, said the merger will accelerate growth ambitions by combining complementary technologies and expertise. Axalta CEO Chris Villavarayan will serve as Deputy CEO, and Rakesh Sachdev, Axalta’s chair, will become chair of the combined company’s one‑tier board. AkzoNobel will pay a special cash dividend to its shareholders equal to €2.5 billion minus any regular dividends paid in 2026 before completion, reflecting the company’s commitment to returning value to investors.
Axalta shares surged about 13 % in pre‑market trading on the announcement day, while AkzoNobel shares rose roughly 5 % on the Euronext Amsterdam exchange. The market reaction was driven by expectations of significant cost savings, the strong profitability of Axalta, and the creation of a larger, more competitive entity with a robust financial profile.
Regulatory approval will come from the U.S. Federal Trade Commission and the European Commission, and shareholder votes are expected to take place in the 2026‑2027 window. The combined company will be domiciled in the Netherlands, maintain dual headquarters in Amsterdam and Philadelphia, and will transition to a single listing on the New York Stock Exchange after a period of dual listing.
The merger reflects a broader consolidation trend in the global paint and coatings industry, as companies seek scale to navigate volatile raw‑material costs, regulatory pressures and intense competition. The combined entity will be well positioned to invest in sustainable products and digitalization, and could become a major challenger to peers such as PPG, Sherwin‑Williams and BASF. The deal also signals a strategic shift toward high‑margin specialty coatings, aligning with industry trends toward eco‑friendly solutions and advanced technologies like AI and IoT.
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