A Supply Share of Up to 50% Raises UK Concerns Over AkzoNobel-Axalta Merger
Key Facts
On 11 November 2026, the UK Competition and Markets Authority concluded that the merger of AkzoNobel and Axalta could result in a substantial lessening of competition in one or more markets in the UK. It said the combined company would become the clear leader in the vehicle refinish coatings market, with a combined supply share of between 40% and 50%. The authority said the deal would be referred for an in-depth Phase 2 investigation unless the parties offered commitments it accepted to address its concerns. The objection concerns coatings used by repair centres and body shops to repair and repaint vehicles. The decision puts the deal on a new regulatory path before completion, with concerns still centred on the possibility of reduced competition in this business.
The authority said AkzoNobel and Axalta compete closely in the coatings market, offering similar products and ranges, as well as comparable levels of technical support. It added that both companies have broad approvals from vehicle manufacturers and insurers, strengthening their competitive proximity. The authority said other suppliers would not offset the loss of competition between them, particularly in the premium segment. In its assessment, customers could face higher prices or a decline in quality and support as a result of the merger. This matters to repair shops and paint centres that rely on approved products and technical services to meet vehicle repair needs.
The authority set 18 November 2026 as the final deadline for the parties to submit commitments it might accept to address competition concerns and avoid a referral. If the parties do not submit commitments by the deadline, or the authority does not consider them sufficient, it will refer the deal for an in-depth Phase 2 investigation. AkzoNobel and Axalta said they intend to address UK concerns with the same remedy proposal included in the European Commission’s decision. The proposal involves the sale of AkzoNobel’s European vehicle refinish coatings business, including its UK operations. The next step will focus on whether the authority accepts this measure as an adequate remedy for the concerns raised in its Phase 1 decision.
The Phase 1 decision followed the authority’s launch of its formal merger review on 16 September 2026 and its announcement of the result on 11 November. In thermal powder coatings, the authority said it saw no significant competition concerns in the UK and the European Economic Area. It attributed this to continued sufficient competition from alternative suppliers and customers’ ability to reallocate purchases because they have multiple sources of supply. The stated concerns are therefore focused on vehicle refinish coatings, while the authority saw no comparable basis for significant intervention in thermal powder coatings. Shareholders of both companies approved the deal at meetings held on 5 August 2026, but completion remained subject to regulatory approvals and other closing conditions.
The companies announced their agreement to merge on 18 November 2025 in an all-stock deal with an enterprise value of about $25 billion. They said the combined group would bring together their coatings businesses, with revenue of about $17 billion. At the time of the announcement, they estimated the group would generate recurring operating savings of about $600 million a year, with 90% expected to be achieved within the first three years after closing. The announced structure provides for AkzoNobel shareholders to own 55% of the group and Axalta shareholders 45%, alongside a €2.5 billion special cash distribution from AkzoNobel before completion, subject to the announced terms. On 11 November, AkzoNobel shares, listed under the ticker AKZOY, closed at $23.53, compared with a close of $23.81 on 10 November.
The companies said they remained confident the merger would be completed by early 2027. That target remains subject to completing regulatory approvals and meeting other closing conditions, as the deal awaits the authority’s decision on the proposed commitments. The companies are due to submit their commitments by 18 November 2026, after which it will be determined whether the process remains in Phase 1 or proceeds to a deeper investigation. The remedy the companies referred to includes the sale of AkzoNobel’s European vehicle refinish coatings business, including its UK operations. The outcome of the authority’s review remains a direct factor in the deal’s remaining regulatory path.