EU conditionally approves $25 billion merger of AkzoNobel and Axalta
Key Facts
The European Commission on November 6 granted conditional approval for the $25 billion merger of Dulux maker AkzoNobel and U.S. rival Axalta, following an agreement to sell assets in Europe to address competition concerns. The Commission said the divestment involves AkzoNobel’s vehicle refinish coatings business in Europe. The decision means the deal has secured EU approval after addressing regulators’ concerns about the impact of combining the companies’ operations. Those concerns center on the vehicle refinish coatings market, where a decline in the number of competitors could affect repair shops and consumers. Approval remains contingent on implementing the agreed commitment to sell the business.
The sale concerns coatings used to repair vehicles, the business the Commission required the companies to divest in Europe. The Commission said its concern is that the combined company’s substantial market power could enable it to raise the prices paid by auto repair shops and consumers. The deal’s impact therefore extends beyond competition among coatings suppliers to the repair costs borne by customers. Teresa Ribera, the EU’s competition chief, said the commitments are intended to ensure the company cannot “extract high margins from car repairs by raising prices or reducing quality.” The Commission is thus addressing both price and quality through the divestment.
The Commission set conditions for a potential buyer of the business to be sold: it must be a coatings supplier or an industrial company operating in a related sector. The condition is intended to transfer the business to a party with ties to the industry, rather than make the divestment a formality without a buyer capable of operating it. The published information did not name a specific buyer or give a sale price. This means that resolving the competition concerns depends on completing the sale in line with the specified criteria. The step remains part of the conditions attached to European approval.
The companies announced the merger on November 18, 2025, as an all-stock merger of equals, estimating at the time that the combined company would have revenue of about $17 billion and an enterprise value of about $25 billion. Under the announced terms, Axalta shareholders will receive 0.6539 AkzoNobel shares for each Axalta share they own. AkzoNobel shareholders were expected to own 55% of the combined company, with Axalta shareholders holding 45% after closing. These percentages provide a framework for allocating ownership when the deal is completed, while conditional European approval adds a new regulatory step to the process. The ownership figures remain contingent on the merger closing under the announced terms.
In an investor presentation filed with the U.S. Securities and Exchange Commission on October 21, AkzoNobel said it still aimed to close the deal in early 2027. The company estimated potential cost savings of about $600 million, with about 90% expected to be realized within three years of closing. It also forecast revenue synergies of between 100 and 200 basis points. The figures outline the benefits AkzoNobel expects from combining the companies, alongside the commitment to sell the European coatings business to address competition concerns. The company had described the deal in its third-quarter results as on track, with closing expected in early 2027, subject to regulatory approvals.
The U.K. review remains open alongside the European approval. The Competition and Markets Authority set November 11, 2026, as the deadline for its phase-one decision in its investigation of the merger. The date comes five days after the European approval was announced on November 6. The U.K. review is another regulatory milestone in the timetable AkzoNobel has set for completing the deal in early 2027. The targeted closing remains subject to securing the relevant approvals and meeting regulatory conditions.