UK Competition Authority Refers AkzoNobel-Axalta Merger to Phase 2 Over Automotive Refinish Coatings
Key Facts
On November 11, 2026, the UK Competition and Markets Authority concluded that the merger of AkzoNobel and Axalta could substantially lessen competition in the UK market for automotive refinish coatings. The authority said the deal will move to an in-depth Phase 2 investigation unless the parties offer an acceptable undertaking to address its concerns. The case centers on coatings used to repair vehicles, not the UK paint market as a whole. The authority estimated that the merged entity would become the clear leader in this market, with a combined share of supply between 40% and 50%. It gave the companies until November 18 to offer undertakings as an alternative to referral.
The authority’s concerns were based on the close competition between the companies in automotive refinish coatings. It said they offer similar products and product ranges, alongside similar technical support. Their products also have broad approvals from vehicle manufacturers and insurers, strengthening their position in meeting customer needs. The authority considers that their merger would remove existing competition between closely competing suppliers in this sector. This finding is particularly significant in the premium segment of the market, where the authority considered that available alternatives would not exert enough pressure to offset the loss.
The authority said weak competitive pressure from alternatives could leave customers with fewer choices after the deal is completed. It warned that they could face higher prices or lower quality and support as a result of the merger. To assess these risks, the authority examined bidding data and the companies’ internal documents. It also gathered evidence from customers and competitors and used competitors’ sales data to reconstruct market shares. Its review therefore covered internal commercial evidence and the views of market participants, alongside its assessment of the scale of competing suppliers. On this basis, the authority linked its concerns to the overlap between the companies in this specific activity.
The Phase 1 concerns do not extend to all the coating products supplied by the companies. The authority found no substantial competition concerns in thermosetting powder coatings in the UK and the European Economic Area. It concluded that alternative suppliers would remain able to exert sufficient competitive pressure in this activity. It also considered that multiple sources of supply would allow customers to redistribute their purchases among suppliers. This distinguishes the powder coatings market from the automotive refinish coatings market, which is the focus of the potential Phase 2 referral. The UK investigation is therefore confined to the area of overlap where the authority said alternatives would not make up for the competition between the parties.
The companies said they would seek to address the authority’s concerns with the same remedy proposal they presented to the European Commission. The proposal involves divesting AkzoNobel’s European automotive refinish coatings business, including its UK operations. The European Commission had approved the deal subject to conditions after the companies committed to divest AkzoNobel’s European automotive refinish coatings business. The companies said this remedy removes the horizontal overlap in the European Economic Area, the UK and Switzerland. Avoiding an in-depth UK investigation, however, remains contingent on the authority accepting the undertakings offered by the parties to address its competition concerns.
The November 18 deadline is the next immediate step in the UK process. If the parties do not offer an acceptable undertaking, the deal will be referred to a Phase 2 investigation, as the authority announced. The deal had received approval from AkzoNobel and Axalta shareholders at their meetings on August 5, 2026. The companies said the resulting entity would combine their businesses in a global coatings company with revenue of about $17 billion. They also estimated targeted annual cost savings of about $600 million, with 90% expected to be achieved within the first three years after completion. According to their announcement on November 6, completion was expected in early 2027, subject to outstanding regulatory approvals.