• According to the terms of the agreement, Axalta shareholders will receive 0.6539 shares of AkzoNobel stock for each share of Axalta common stock they own.
• AkzoNobel shareholders will own 55% of the combined company, while Axalta shareholders will own the remaining 45%.
• The firm will also be present in 160 countries and is projected to have a combined revenue of $17 billion.

Dulux Paint parent AkzoNobel has agreed to buy U.S.-based Axalta Coating Systems Ltd (AXTA) in an all-stock deal to create one of the biggest coating makers, with an enterprise value of $25 billion, the firms said on Tuesday.

Axalta shares rose 13% in extended trading on Monday after a report suggested the two firms were close to a deal. Following the agreement's closing, the companies expect to lock in benefits of approximately $600 million, 90% of which are expected to be achieved within the first three years.

Details Of The Deal

According to the terms of the agreement, Axalta shareholders will receive 0.6539 shares of AkzoNobel stock for each share of Axalta common stock they own. AkzoNobel shareholders will own 55% and Axalta shareholders will own 45% of the combined company on a pro forma basis immediately after the closing, expected to occur in late 2026 to early 2027.

In connection with the deal, AkzoNobel will pay 2.5 billion euros in special cash dividends, minus the aggregate amount of any regular annual and interim dividends paid by AkzoNobel to its shareholders in 2026 prior to completion.

The combined company will transition to a single New York listing with dual headquarters in Amsterdam and Philadelphia, and be domiciled in the Netherlands. Current AkzoNobel CEO Greg Poux-Guillaume will lead the combined company as its chief executive, and Axalta CEO Chris Villavarayan will serve as Deputy CEO.

Retail sentiment on Stocktwits about Axalta was in 'bullish' territory at the time of writing, compared with 'neutral' a day ago.

Merger Comes Amid Coating Slowdown, Activist Pressure

The combined company will have an enhanced global footprint spanning 173 manufacturing sites and 91 research and development facilities worldwide. It will also be present in 160 countries and is projected to have a combined revenue of $17 billion.

“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,” Axalta CEO Chris Villavarayan said.

In the third quarter, Axalta's net sales were approximately $1.3 billion, down 2% year-over-year, driven by weak sales in North America. U.S. President Donald Trump's uncertain tariff policy and weak consumer sentiment have affected the demand for materials. Even AkzoNobel had slashed its earnings forecast on tepid customer spending.

The two firms had previously attempted to merge in 2017, according to a Bloomberg News report, but were unable to agree on the terms. Earlier this year, Cevian Capital unveiled a 5% stake in Akzo Nobel, seeking a strategic shift.

Axalta shares have fallen 17.5% this year.

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