AkzoNobel and Axalta to combine in all-stock merger of equals under new name

AkzoNobel and Axalta have announced a definitive agreement to combine in an all-stock merger of equals, creating a “premier global coatings company” with an enterprise value of $25 billion, according to a press release.

The companies say coming together will “better serve customers across key end markets and enhance value for shareholders, employees, and other stakeholders” through complementary portfolios of highly regarded brands.

“Anchored in both companies’ proud histories and broad expertise, the combined business will have a highly attractive financial profile, industry-leading innovation capabilities, and a balanced global footprint spanning over 160 countries to bring global capabilities to local customers,” the release states.

“With attractive margins and robust cash flow generation, the combined company will be well-positioned to drive substantial growth and shareholder value creation, building on 2024 revenues of approximately $17 billion and $1.5 billion in pro forma Adjusted Free Cash Flow.”

The combination is expected to drive identified and actionable run-rate synergies of $600 million, 90% of which are expected to be achieved within the first three years following the close of the transaction, according to the release.

The companies expect the transaction to close in late 2026 to early 2027.

“We’re excited to enter a new chapter in our long and proud history as a leader in the paints and coatings industry,” said Greg Poux-Guillaume, AkzoNobel CEO and Board of Management chairman, in the release.

“This merger will allow us to accelerate our growth ambitions by bringing together highly complementary technologies, expertise and passionate people to unlock our full combined potential. I’m excited to lead our talented teams in bringing the best of both companies to our customers and shareholders, delivering outstanding value to both.”

Targeted synergies are identified and actionable, arising primarily from procurement, SG&A efficiencies, footprint optimization, and improved supply chain management, the release states.

“This combination represents a compelling opportunity. It’s a great value proposition for all our stakeholders, both in the Netherlands, where we maintain our domicile, and internationally, including our shareholders, customers, and employees,” said Ben Noteboom, AkzoNobel supervisory board chairman, in the release.

“It will create a world leader in coatings and is a significant step that will drive sustainable growth and allow us to better serve our customers. By uniting two world-class organizations, we’re creating a strong platform for the future, built on a solid foundation of shared values and heritage.”

The companies’ portfolios include coatings solutions with franchises across Powder, Aerospace, Refinish, Mobility, Marine and Protective, Industrial Coatings, and Decorative Paints. The release states the combined portfolio will be differentiated by “its breadth of solutions across approximately 100 well-known brands.”

“We are pleased to enter into this transaction with AkzoNobel and join our best-in-class platforms to enhance innovation, develop new capabilities, and further strengthen customer relationships,” said Chris Villavarayan, Axalta CEO and president, in the release.

“As our industry continues to grow and evolve, this combination with AkzoNobel enables us to do the same, with a sharper competitive edge and new avenues and opportunities for growth. Together, AkzoNobel and Axalta are positioned to establish a profitable and sustainable path forward as a leader in the coatings industry. Like AkzoNobel, we value our people as our greatest asset, and we are excited to unite our rich, innovation-focused cultures.”

Rakesh Sachdev, Axalta Board of Directors chair, added, “The Axalta Board is confident that this combination with AkzoNobel will create significant value for our shareholders as we move ahead. Led by an experienced management team with a track record of operational efficiency and excellence, we expect the meaningful synergy opportunities and enhanced financial profile of the combined company will drive substantial value creation. We look forward to joining Axalta’s and AkzoNobel’s strengths to create new opportunities across our global stakeholder base.”

The combined company will have a global footprint spanning 173 manufacturing sites and 91 R&D facilities.

“Sharing best practices across two leading research platforms in the coatings space is expected to accelerate high-value innovation,” the release states. “The combined company will have approximately $400 million combined annual R&D spend; 91 R&D facilities for local customer needs; approximately 4,200 research fellows, scientists, and engineers; and around 3,200 granted and pending patent applications.”

The combined company is also expected to have “industry-leading” profitability with strong adjusted EBITDA margins approaching 20% and substantial cash flow generation.

Revenues are expected to be $17 billion, with adjusted EBITDA of $3.3 billion and pro forma adjusted free cash flow of $1.5 billion.

“This will provide significant flexibility to support strategic and capital allocation priorities, including consistent capital returns through a regular dividend,” the release states. “Net leverage is targeted to be 2 to 2.5 times, with a strong commitment to holding an investment-grade credit rating.”

Leadership, corporate governance, and headquarters
Upon closing, the combined company will have a one-tier Board, led by Sachdev, and Noteboom as vice chair.

The Board will have 11 directors – four from each company and three independent members. Of the 11 members, two will be executive directors and nine will be non-executive directors.

Each company expects to hold its respective Extraordinary General Meeting of Shareholders tentatively in mid-2026.

Poux-Guillaume will be the new company’s CEO, and Villavarayan will be its deputy CEO.

Carl Anderson, current Axalta senior vice president and chief financial officer (CFO), will serve as the CFO of the combined company. Current AkzoNobel CFO, Maarten de Vries, will retire from AkzoNobel before closing, as previously announced, the release states.

The combined company will have a new name and ticker symbol, which has not yet been announced, and will have dual headquarters in Amsterdam and Philadelphia.

Transaction details
The agreement terms were unanimously approved by AkzoNobel’s Supervisory Board and Board of Management, as well as Axalta’s Board of Directors. Axalta shareholders will receive 0.6539 shares of AkzoNobel stock for each share of Axalta common stock owned.

In connection with the transaction, AkzoNobel will pay a special cash dividend to AkzoNobel shareholders equal to €2.5 billion ($2.9 billion) minus the aggregate amount of any regular annual and interim dividends paid by AkzoNobel to its shareholders in 2026 before completion.

AkzoNobel shareholders will own 55% and Axalta shareholders 45% of the combined company on a pro forma basis immediately after closing, the release states.

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