European Commission conditionally clears Axalta and AkzoNobel merger

what happened

The European Union said on Friday it had conditionally approved the proposed all-stock merger of Axalta Coating Systems and AkzoNobel. According to Seeking Alpha, the decision followed an agreement by the companies to sell certain assets in Europe.

The European Commission, the bloc's competition authority, said the groups will divest AkzoNobel's vehicle refinish coatings business in Europe to a suitable buyer. Regulators were concerned the combined company could gain excessive market power and raise prices for repair garages and consumers.

The merged group will have roughly $17 billion in revenue and a wide portfolio spanning powder, aerospace, refinish, mobility, marine, protective, industrial and decorative coatings. AkzoNobel CEO Greg Poux-Guillaume, who will lead the combined company, called the approval an important milestone toward completing the deal.

why it matters

For shareholders of both companies, the decision removes one major regulatory risk, though the deal has not closed and the final terms of the European asset sale are still unknown. For the coatings industry, the tie-up is a significant consolidation that could reshape competitive dynamics.

market impact

AkzoNobel and Axalta: lower regulatory risk for the deal supports the shares

• ▲AkzoNobel shares pressure up — conditional EU approval removes a key regulatory hurdle to the merger

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