EU Clears $25 Billion AkzoNobel–Axalta Merger With Asset Sale
The European Commission has conditionally approved the roughly $25 billion merger of Dutch paint maker AkzoNobel and US coatings group Axalta, clearing one of the biggest hurdles in front of a deal that would create one of the world’s largest paint and coatings companies.
The decision, announced on Friday 6 November, is conditional on AkzoNobel selling its European vehicle refinish coatings business — the paints used by body shops and repair garages to repaint cars after accidents, corrosion or wear. The Commission said the sale was needed to address concerns that the combined company’s very strong market power could lead to higher prices for repair garages and consumers.
The two companies announced the all-stock merger of equals in November 2025. Under the agreed terms, Axalta shareholders will receive 0.6539 AkzoNobel shares for each Axalta share they hold, leaving AkzoNobel shareholders with about 55 percent of the combined group and Axalta shareholders with the remaining 45 percent. The companies say the merged group would generate about $17 billion in annual revenue.
A sale to keep repair shops competitive
The required divestment is narrowly targeted. It covers AkzoNobel’s European vehicle refinish operations, including manufacturing capacity, intellectual property, staff and the transitional arrangements needed to run the business. The buyer must be a company in the coatings sector or an industrial player in a related field, and the Commission must approve the purchaser.
The Commission identified no other competition issues across the companies’ businesses or geographic markets, according to dpa-AFX. The remedy is designed to remove the overlap between the two companies’ operations in the European Economic Area, the United Kingdom and Switzerland, where both sell refinish coatings to the same repair market.
AkzoNobel, the maker of Dulux paint, will also pay its shareholders a special dividend of €2.5 billion, taking into account ordinary dividends paid before completion.
The terms of a $25 billion combination
The $25 billion figure is the estimated enterprise value of the combined businesses, not a cash payment. The deal is structured primarily as a share exchange between two broadly comparable companies, and the combined group’s expected $17 billion in revenue is a company estimate based on historical financials, not a forecast of future sales.
Both companies’ shareholders approved the merger on 5 August, according to Axalta’s quarterly filing. The companies continue to expect the transaction to close in early 2027, subject to the remaining regulatory approvals and customary closing conditions.
The deal is the latest in a run of large industrial combinations this year. Fox completed its $22 billion acquisition of Roku this week, while investors pushed back on Anthropic’s $1.5 trillion IPO valuation as the artificial intelligence sell-off continued. Berkshire Hathaway’s cash pile hit a record $377 billion in the third quarter, underlining how much capital large US companies are holding as deal activity picks up.
What still stands between the companies and closing
EU clearance removes a major obstacle, but it does not mean the merger has already taken place. The UK competition review remains active, with a Phase 1 decision scheduled for 11 November, and the companies must still obtain approval for a suitable buyer of the divested refinish business.
Axalta is separately divesting its North American Building Products business, a move announced on 20 October to address regulatory requirements in the United States. That sale is distinct from the European remedy imposed by Brussels.
A sector consolidating under cost and tariff pressure
The merger is part of a wave of consolidation in the coatings sector, which faces rising costs and uncertainty created by US tariffs, Reuters reported. Paint and coatings makers have been squeezed by higher raw material and energy costs, while tariffs have complicated supply chains that cross the Atlantic in both directions.
Axalta, listed on the New York Stock Exchange and based in Philadelphia, brings strength in automotive and industrial coatings, while Amsterdam-based AkzoNobel is stronger in decorative paints and powder coatings. Together, the companies say their portfolio will span decorative paints, industrial and protective coatings, mobility, marine, aerospace, powder and refinish products.
If the remaining approvals land as planned, the combined company will rank among the world’s largest coatings suppliers — and the sale of the European refinish business will decide whether independent repair shops keep a competitive alternative in the market the Commission was most worried about.
