Regulators require two asset sales for the Akzo Nobel-Axalta merger

CEO initiates buyer search for European refinishing unit

European Union and U.S. Federal Trade Commission approval of Akzo Nobel’s proposed merger with Axalta Coating Systems hinges on two separate asset sales. The EU demands a signed deal with a buyer for Akzo’s European vehicle refinishing business, while the FTC requires the sale of Axalta’s wood-paints business in the United States to close, Akzo Chief Executive Greg Poux-Guillaume said. Both sales are aimed at securing clearance from the EU and the FTC, the two regulators reviewing the deal.

The Dutch paint company and Axalta, its U.S. peer, are working to gain approval for a transaction that would create a group with a combined market value of roughly $19 billion. Regulators fully shared the divestiture requirement with Akzo only recently, according to Poux-Guillaume. “The moment they gave us clear indications, we initiated the discussions,” he said. Akzo is now in the beginning stages of talks to find a buyer for the European refinishing business, as authorities require a sale agreement to greenlight the Axalta merger.

Poux-Guillaume said Akzo is considering both industry players and private equity as potential buyers. Industrial businesses like Akzo’s unit are historically attractive to both sectors, with investment firm Carlyle recently purchasing a majority stake in BASF’s former coatings business for 5.8 billion euros ($6.52 billion), years after it bought Akzo’s former specialty-chemicals unit — now called Nouryon — together with Singapore’s sovereign-wealth fund GIC.

Axalta said Tuesday that the sale of its wood-paints business in the U.S. was under way in response to the regulatory requirements for the Akzo merger.

“Really these are the only two remedies we’ve been asked to prepare anywhere in the world,” Poux-Guillaume said. “We strongly believe that if we execute those two remedies, we will be able to get regulatory approval very soon.”

If approved, the transaction would close by the beginning of 2027 under the new name Axanzo.

Akzo’s shares rose 2.43% and Axalta’s gained 0.21%.

Separately, on Wednesday, Akzo said it booked flat revenue for the third quarter at 2.54 billion euros and a narrowed net loss of 178 million euros. The update came as the company worked to advance the merger and find a buyer for its European refinishing operation.