AkzoNobel and Axalta revise future merger governance arrangements, separate company Q2 results

AkzoNobel and Axalta Coating Systems have announced enhancements to proposed governance arrangements for the combined company following completion of their pending merger of equals.

In June, the U.S. Securities and Exchange Commission (SEC) declared effective the registration statement on Form F-4 filed by AkzoNobel in connection with the proposed all-share merger. Axalta also filed a definitive proxy statement

A special meeting of stockholders to be held at 9 a.m. on Aug. 5.

In a joint July 23 press release, the companies state they have “engaged extensively” with shareholders and other stakeholders on the governance of the combined company.

That dialogue has led to the following refinements:

• • “Annual re-election of all Directors following the initial three-year period after completion (previously contemplated following a five-year period after completion).
  • “Approval threshold applicable during the initial three-year period after completion of two-thirds of non-executive directors (previously contemplated as 75%) for (i) any proposal to the general meeting regarding the appointment and dismissal of Directors, (ii) the appointment and removal of the CEO, deputy CEO and CFO, (iii) designation of the chair and vice chair titles and (iv) amendments to the remuneration policy.”

“We are pleased to announce these governance enhancements following constructive engagement with our shareholders,” said Rakesh Sachdev, Axalta Board of Directors chair, in the release. “We believe these changes reinforce our commitment to strong corporate governance and effective Board oversight while further strengthening the governance framework of the combined company. We appreciate the feedback we’ve received throughout this process and remain confident that this combination will create a premier global coatings company that delivers significant long-term value for all shareholders.”

Ben Noteboom, AkzoNobel Supervisory Board chairman, added: “We have listened thoughtfully to our shareholders and believe these changes reflect the spirit of partnership and accountability that will define the combined company from day one. We are grateful for the constructive engagement that has shaped these improvements, which further align the governance of the combined company with the interests of all shareholders and other stakeholders.”

The release states that the governance updates don’t require any changes to the proposed Articles of Association of the combined company.

A separate press release from AkzoNobel, published July 22, shares highlights of its Q2 earnings results.

Highlights, compared to Q2 2025, include:

• • Organic sales growth up 2% on pricing, stable volumes; revenue down 1%
  • Operating income increased to €251 million (2025: €214 million)
  • Organic adjusted EBITDA growth1 €18 million, driven by pricing
  • Adjusted EBITDA margin increased to 15.4% (2025: 15.0%)
  • Net cash from operating activities positive €170 million (2025: €234 million)

Automotive and Specialty volumes were also up mid-single digits, according to CEO and Management Board Chairman Gregoire Poux-Guillaume.

Half-year 2026 results compared to half-year 2025 include:

• • Organic sales growth flat; revenue down 5% on adverse currencies
  • Operating income increased to €428 million (2025: €406 million)
  • Organic adjusted EBITDA growth1 €39 million, driven by pricing
  • Adjusted EBITDA margin increased to 14.9% (2025: 14.3%)
  • Net cash from operating activities positive €84 million (2025: €122 million)

“AkzoNobel had another strong quarter, with organic sales, operating income and adjusted EBITDA all increasing,” said AkzoNobel CEO Greg Poux-Guillaume in a press release. “Adjusted EBITDA margin was up by 40 base points, which marks the fifth consecutive quarter of increase. This demonstrates that our plan is delivering value regardless of market conditions. Robust pricing and a relentless focus on cost efficiency continue to support our performance.

“We’re delivering today while laying the foundations for a brighter tomorrow. We achieved our ambition of reducing carbon emissions from our operations by 50%, four years ahead of our 2030 target. Our merger with Axalta is progressing as planned, with the shareholder vote on Aug. 5 and an expected closing at the end of 2026 or early 2027. And we remain on track to achieve our full-year targets.”

As for outlook, AkzoNobel expects, based on current market visibility including current geopolitical developments and prevailing trading conditions, to deliver €100 million of adjusted EBITDA improvement in constant currencies.

“As a result, adjusted EBITDA for the full-year 2026 is expected to be at or above €1.47 billion, based on year-end 2025 exchange rates and adjusted for the India divestment,” the release states. “For the mid-term, AkzoNobel aims to expand profitability to deliver an adjusted EBITDA margin of above 16% and a return on investment between 16% and 19%, underpinned by organic growth and industrial excellence.

“The company expects leverage to be around 2 times net debt/adjusted EBITDA by the end of 2026. In the mid-term, AkzoNobel aims to maintain leverage around 2 times, while remaining committed to an investment-grade credit rating.”

In the company’s Q2 earnings call with investors, Poux-Guillaume said “the value case here is substantial” regarding the merger with Axalta.

“We’ve identified north of $600 million of cost synergies with roughly 90% expected within the first three years post-close,” he said. “Beyond cost, we’re targeting 100 to 200 basis points of revenue synergy uplift. In addition, the combined company will have a single listing on the New York Stock Exchange after 12 months of dual listing.

“Looking past the vote, the road map is clear. We’ll finalize integration planning to accelerate synergy capture, announce the operating model and the leadership team, complete revenue synergy work supported by clean teams, and obtain the remaining regulatory clearances. We remain firmly on course to close by the end of 2026 or early 2027. In short, this is a compelling combination. The preparations are fully on track, and we’re focused on executing every step between here and close.”

Axalta will release its Q2 earnings results on July 28.

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