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AkzoNobel and Axalta Coating Systems have received conditional approval from the European Commission for their proposed all-stock merger of equals, advancing plans to create a global coatings company with approximately $17 billion in annual revenue.
The November 6 approval follows the companies' disclosure that they plan to divest two businesses as part of the regulatory clearance process, including Axalta's North American wood coatings business, a development of particular interest to manufacturers and suppliers in the woodworking, furniture and cabinet industries.
The companies also intend to divest AkzoNobel's European vehicle refinish business, a condition of the European Commission's approval designed to address competitive overlap in that market.
Planned Divestiture of North American Wood Coatings Business
In an October 21 investor presentation, AkzoNobel and Axalta confirmed plans to divest Axalta's North American Wood business as they work toward securing remaining regulatory approvals.
The companies indicated that approximately two-thirds of the required regulatory approvals had been secured at that time, with several remaining clearances, including those in the United States and European Union, advancing through the review process.
They also said they had not been asked to prepare divestiture remedies involving any other businesses or jurisdictions.
For the North American woodworking industry, the planned sale could represent a significant ownership change within the industrial wood coatings market, which serves manufacturers of furniture, cabinetry, millwork and other finished wood products.
The companies have not identified a buyer, announced a sale price or disclosed a timeline for the proposed wood coatings divestiture in the October 21 presentation.
Merger Would Create Global Coatings Company
The proposed merger would combine AkzoNobel's and Axalta's complementary product portfolios and technologies across powder coatings, industrial coatings, decorative coatings, automotive refinishing, aerospace, mobility, and marine and protective applications.
The combined company is expected to generate approximately $17 billion in annual revenue.
According to the companies' October investor presentation, the merger is projected to generate $600 million in cost synergies, with approximately 90% expected within three years of closing. The companies also anticipate a revenue synergy uplift of 100 to 200 basis points.
“Receiving the European Commission’s approval is an important milestone as we move closer to completing our merger with Axalta,” said Greg Poux-Guillaume, CEO of AkzoNobel. “We’re well on track and look forward to bringing together our complementary technologies, expertise and talented teams to accelerate growth.”
Poux-Guillaume is expected to serve as CEO of the combined organization, while Axalta CEO and President Chris Villavarayan will become deputy CEO.
Villavarayan said the merger would strengthen the companies' ability to serve customers worldwide and accelerate investment in differentiated coating technologies.
Transaction Expected to Close in Early 2027
Shareholders of both companies approved the proposed combination in August, and integration planning is underway.
The companies continue to target an early 2027 closing, subject to remaining regulatory clearances and other closing conditions.
The planned divestitures are expected to help resolve regulatory concerns while preserving the broader strategic benefits of the transaction.
