AkzoNobel and Axalta Coating Systems have agreed to merge in an all-stock transaction that will combine the two companies into a global coatings business with an enterprise value of about $25 billion.
The merger is structured as a merger of equals and is expected to create a company with approximately $17 billion in projected 2024 revenue.
Under the terms of the agreement, AkzoNobel shareholders will own 55% of the combined company, while Axalta shareholders will hold 45%.
The new entity will have dual headquarters in Amsterdam and Philadelphia, be domiciled in the Netherlands, and move to a single listing on the New York Stock Exchange.
According to the companies, the merger brings together complementary portfolios that span powder coatings, aerospace, refinish, mobility, marine and protective, industrial coatings, and decorative paints.
The combined business will encompass roughly 100 brands, operate 173 manufacturing locations, and maintain 91 R&D facilities, providing broader market coverage and expanded commercial reach in more than 160 countries.
Pro forma adjusted EBITDA is expected to be about $3.3 billion, with an approximate 20% margin, and adjusted free cash flow is projected at $1.5 billion.
The companies said the merger is expected to generate roughly $600 million in pre-tax run-rate synergies, largely driven by procurement efficiencies, reductions in SG&A, footprint optimization, and supply-chain improvements.
About 90% of the identified synergies are targeted within three years of closing.
The combined company’s governance will follow a one-tier board structure. Axalta Chair Rakesh Sachdev will serve as chair of the combined board, while AkzoNobel CEO Greg Poux-Guillaume will become CEO of the merged company.
“The Axalta Board is confident that this combination with AkzoNobel will create significant value for our shareholders as we move ahead,” Sachdev said.
“Led by an experienced management team with a track record of operational efficiency and excellence, we expect the meaningful synergy opportunities and enhanced financial profile of the combined company will drive substantial value creation.”
Shares of AkzoNobel traded down 2.5% at about $21 on the news, while Axalta shares were little changed at $28.