AkzoNobel NV and Axalta Coating Systems are nearing regulatory clearance for their $25 billion merger after identifying two businesses for sale to address antitrust concerns in the United States and European Union, according to Reuters.
The Dutch paint manufacturer plans to divest its European automotive refinishing operations, while U.S.-based Axalta intends to sell its American wood finishes business. The proposed disposals represent the full extent of the remedies regulators have requested so far, AkzoNobel Chief Executive Officer Greg Poux-Guillaume told Reuters in an interview published Wednesday.
The developments mark an important step toward completing one of the coatings industry’s largest proposed combinations, with the companies maintaining their target of closing the transaction in early 2027.
According to Reuters, Poux-Guillaume said competition authorities had not sought additional concessions beyond the two planned divestitures. The companies are pursuing approval from the U.S. Federal Trade Commission and clearance under the European Union’s initial merger review process.
The limited scope of the proposed remedies could help the companies avoid a more extensive restructuring of their businesses as they work toward completing the all-stock transaction.
European Antitrust Decision Expected in November
European regulators are expected to reach a decision on the proposed merger in November, according to Jefferies analysts cited by Reuters.
The European Commission received formal commitments from the companies last week, although the regulator did not publicly identify the assets covered by those proposals.
Reuters previously reported, citing people familiar with the discussions, that selling AkzoNobel’s European vehicle refinishing business could resolve the principal competition concerns surrounding the transaction.
The proposed divestiture would remove an area of potential overlap between the two coatings manufacturers, whose operations serve automotive and industrial customers.
Separately, Axalta disclosed plans to sell its U.S. wood coatings operation in a regulatory filing Tuesday, Reuters reported. That disposal forms part of the companies’ efforts to obtain the necessary American regulatory approval.
The proposed remedies remain subject to regulatory review, and neither jurisdiction has issued the final approvals required to complete the transaction.
Related: AkzoNobel, Axalta Near EU Approval for $25 Billion Merger
Merger Advances After Rejected Takeover Proposal
AkzoNobel’s continued pursuit of the Axalta combination follows its rejection of a competing cash takeover proposal earlier this year.
In May, the Dutch company turned down a €12.5 billion ($14 billion) offer from Japanese coatings manufacturer Nippon Paint Holdings and U.S. rival Sherwin-Williams, according to Reuters.
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AkzoNobel argued that the proposal failed to reflect the company’s value and would have resulted in its businesses being divided between the two prospective buyers.
Instead, the company continued with its planned share-based merger with Axalta, positioning the transaction as an alternative to a takeover and subsequent breakup.
The combination would bring together two major suppliers of paints and specialty coatings, expanding their collective presence across automotive, industrial and other end markets.
The companies previously outlined plans for a combined business with approximately $17 billion in annual revenue and an enterprise value of about $25 billion, according to earlier reporting by European Coatings.
Completion Timeline Remains Intact
The regulatory developments come as AkzoNobel continues to reaffirm its expectations for completing the merger.
In its third-quarter earnings announcement Wednesday, the company maintained its forecast for a closing in early 2027, subject to regulatory approvals and other conditions.
AkzoNobel also confirmed its full-year 2026 adjusted earnings outlook of approximately €1.47 billion, providing a separate indication of its expectations for the business ahead of the planned combination.
For the merger, the next significant milestone will be the European Commission’s decision, expected in November.
Approval in Europe and the United States would remove two major regulatory obstacles to the transaction, although completion would still depend on satisfying any remaining closing requirements.
With no further asset disposals currently being demanded by regulators, according to Poux-Guillaume’s comments to Reuters, AkzoNobel and Axalta remain positioned to complete their planned combination during the first months of 2027.
Source: Reuters
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