Dulux owner AkzoNobel agrees $25bn merger with paint rival Axalta

Dulux owner AkzoNobel agreed to combine with paint and chemicals company Axalta to create a business with an enterprise value of $25bn, reviving a deal that had been mooted nearly a decade ago.

Amsterdam-listed Akzo and New York-listed Axalta said on Tuesday that the all-stock merger would unite their “complementary portfolios of highly regarded brands”.

The combined group will have a single listing in New York but maintain dual headquarters in Amsterdam and Philadelphia. It will have revenues of about $17bn, making it one of the largest operators in the coatings market, and the merger is expected to generate savings of about $600mn within three years.

AkzoNobel chief executive Greg Poux-Guillaume will lead the combined company, while Axalta’s Chris Villavarayan will be his deputy at the new business that has yet to be named.

“This merger will allow us to accelerate our growth ambitions by bringing together highly complementary technologies, expertise and passionate people,” said Poux-Guillaume.

AkzoNobel shareholders will own 55 per cent of the combined company, with Axalta investors taking 45 per cent. As part of the deal, AkzoNobel will pay a cash dividend of about €2.5bn to its shareholders.

Akzo, whose shares are trading at roughly half their 2021 peak, recently implemented a turnaround strategy to help boost sales, cutting jobs and disposing of non-core assets.

In August, activist investor Cevian took a roughly 3 per cent stake in the Dutch group, becoming a top shareholder and backing the company’s plan to boost performance.

Akzo and Axalta had previously held talks in 2017, after Akzo successfully fended off a takeover approach from PPG.

The deal is the latest in a long history of mergers and acquisitions by Akzo, including the £8.1bn acquisition of ICI, the UK maker of Dulux paints, in 2007.

Like Akzo, Axalta’s history stretches back more than a century to the European paints business Herberts. That group was later acquired by DuPont, from which it was later separated by US investment group Carlyle in 2013 and renamed Axalta.

Villavarayan said the deal would give Axalta “a sharper competitive edge and new avenues and opportunities for growth”.

The merger is subject to regulatory approval and is expected to complete in late 2026 to early 2027.