UK regulator says AkzoNobel-Axalta merger could threaten competition
The UK Competition and Markets Authority on Wednesday said the anticipated merger between paint makers AkzoNobel NV and Axalta Coating Systems Ltd could result in a "substantial lessening of competition" in the UK.
The ruling concludes a phase one investigation by the regulator.
In June, the boards of Amsterdam-based AkzoNobel NV and Philadelphia-based Axalta said they unanimously continue to recommend the "merger of equals".
The all-stock merger values the combined company at USD25 billion.
Axalta shareholders will receive 0.6539 shares of AkzoNobel stock for each share of Azalta common stock owned, with a special cash dividend of EUR2.5 billion.
AkzoNobel shareholders will own 55% of the combined company and Axalta shareholders will own 45%.
The transaction to close in late 2026 to early 2027.
CMA said the merger will be referred for a phase 2 investigation unless the parties offer an acceptable undertaking to address its concerns. The companies have until November 18 to respond.
AkzoNobel rejected a competing offer from Sherwin-Williams Co and Nippon Paint Holdings Co in May.
The joint proposal was priced at EUR73.00 per share and valued Akzo Nobel at EUR12.5 billion. This represented a 39% premium to AkzoNobel's previous closing price of EUR52.52.
The proposal would have seen Nippon Paint acquire AkzoNobel's decorative paints and industrial coatings businesses, with Sherwin-Williams obtaining Akzo Nobel's marine & protective coatings, automotive & specialty coatings and powder coatings units.
AkzoNobel shares closed down 0.9% at USD63.54 each in Paris on Wednesday.
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