AkzoNobel, Axalta Coating to combine in all-stock merger

AkzoNobel (AKZOY) and Axalta Coating (AXTA) announced that they have entered into a definitive agreement to combine in an all-stock merger of equals, creating a global coatings company with an enterprise value of approximately $25B. The combination is expected to drive identified and actionable run-rate synergies of approximately $600M, 90% of which are expected to be achieved within the first three years following the close of the transaction. Inclusive of run-rate synergies, the combined company is expected to have profitability with adjusted EBITDA margins approaching 20% and cash flow generation. Revenues are expected to be approximately $17B, with adjusted EBITDA of $3.3B and pro forma adjusted free cash flow of $1.5B. Net leverage is targeted to be 2.0x to 2.5x, with a commitment to holding an investment grade credit rating. Upon closing, the combined company will have a one-tier board, led by Rakesh Sachdev, current chair of the Axalta board of directors. Ben Noteboom, current chairman of the AkzoNobel Supervisory Board, will serve as vice chair. The board will be composed of 11 directors – four from each company and three independent members. Of the 11 board 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. Current AkzoNobel CEO, Greg Poux-Guillaume, will serve as CEO of the combined company, and current Axalta CEO, Chris Villavarayan, will serve as Deputy CEO. Current Axalta SVP and CFO, Carl Anderson, will serve as the CFO of the combined company. Current AkzoNobel CFO, Maarten de Vries, will retire from AkzoNobel prior to closing as previously announced. The combined company will assume a new name and ticker symbol, which will be announced in due course, and will have dual headquarters in Amsterdam and Philadelphia. It will be organized under a Dutch holding company with tax residency in the Netherlands. Following a period of dual listing on Euronext Amsterdam and the NYSE, shares of the combined company’s common stock will be listed solely on NYSE. Under the terms of the agreement, which has been unanimously approved by the AkzoNobel Supervisory Board, the AkzoNobel board of management and the Axalta 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 EUR 2.5B minus the aggregate amount of any regular annual and interim dividends paid by AkzoNobel to AkzoNobel shareholders in 2026 prior to completion. AkzoNobel shareholders will own 55% and Axalta shareholders will own 45% of the combined company on a pro forma basis immediately after closing. The companies expect the transaction to close in late 2026 to early 2027, subject to approval by shareholders of both AkzoNobel and Axalta, the receipt of requisite regulatory approvals, authorization for the combined company’s shares to be listed on NYSE, payment of the special dividend by AkzoNobel, completion of AkzoNobel’s works council consultation requirements and the satisfaction of other customary closing conditions.