Regulators are considering a separate question: Would the merger reduce competition in any product or geographic market?

PCI has already examined the proposed combination's scale and implications for the coatings industry, early industry and investor reaction, revised governance arrangements and the new valuation question created by Nippon Paint's proposal for AkzoNobel's Decorative Paints business.d

Company filings show that both AkzoNobel and Axalta received a U.S. Second Request from the Federal Trade Commission. The UK process remains preliminary, according to the Competition and Markets Authority's public case page. An older European Commission decision offers a coatings-specific line of inquiry involving powder coatings, but it cannot establish what regulators are examining today.

What Does the FTC's Second Request Mean?

AkzoNobel and Axalta filed their premerger notifications under the Hart-Scott-Rodino Act on Jan. 21. On Feb. 20, each company received a request for additional information and documentary material from the FTC, according to the companies' May 27 Form F-4.

That request, commonly called a Second Request, is more consequential than a routine initial filing. The FTC's explanation of the merger-review process says a Second Request extends the waiting period and allows the agency to collect documents and data concerning the companies' products, market conditions and the transaction's likely competitive effects. Typically, once both parties have substantially complied, the agency has another 30 days to complete its review, although the parties and the government can agree to additional time.

A Second Request is evidence of an in-depth review, not a finding that the merger is anticompetitive. The FTC identifies three possible outcomes at that stage: allowing the waiting period to expire without a challenge, reaching a consent agreement intended to preserve competition or seeking to stop the transaction in court.

The F-4 does not disclose which products or geographic markets prompted the request. It also does not say whether either company had substantially complied as of the filing date. The Aug. 5 announcements from AkzoNobel and Axalta said required regulatory approvals remain outstanding and continued to project closing in late 2026 or early 2027.

Is Powder Coatings an Area to Watch?

In 2016, the European Commission reviewed AkzoNobel's acquisition of BASF's industrial coatings business. In its published decision, the Commission treated powder coatings as a distinct product market and examined competition at the European Economic Area level and in Germany.

The Commission found that AkzoNobel was the leading powder-coatings supplier in the EEA at the time. Market respondents identified Axalta as AkzoNobel's closest competitor, with Axalta holding an estimated 10% to 20% share by both value and volume. Freilacke and Jotun were also identified as important players.

The Commission nevertheless cleared that transaction. BASF's powder-coatings share was estimated at less than 5% and declining, and the Commission concluded that AkzoNobel would continue to face strong competition from Axalta and local suppliers.

That reasoning is relevant because the competitor cited as part of the competitive constraint in 2016 is now one of the two companies seeking to combine.

The 2016 decision involved a different seller, a different transaction and a regional European market assessment. Its market-share ranges and customer responses are now a decade old. Market positions, capacity, product portfolios and customer alternatives may have changed. The companies' merger announcement also describes the proposed combination as spanning powder, refinish, mobility, marine and protective coatings, aerospace and industrial coatings. Regulators could define markets more narrowly or focus on different products, customers or regions.

The defensible question, therefore, is not whether regulators are targeting powder coatings. It is whether the competitive relationship described by the European Commission in 2016 still exists and, if so, how regulators are evaluating it in this much larger combination.

Where Do the UK and EU Reviews Stand?

The May F-4 says AkzoNobel and Axalta began the European Commission's pre-filing process Jan. 26 and entered pre-notification with the UK Competition and Markets Authority March 13.

The CMA opened a public case page April 16 and invited interested parties to comment through May 1. The page listed the case as open, but it also stated that the CMA had not formally commenced a Phase 1 investigation. The invitation to comment was described as the first part of the agency's information-gathering process.

Neither the filing nor the Aug. 5 releases from AkzoNobel and Axalta reported the completion or outcome of a formal EU review or provided a more detailed jurisdiction-by-jurisdiction update.

Could Regulatory Conditions Change the Deal?

The F-4, CMA case page and Aug. 5 announcements from AkzoNobel and Axalta did not identify a remedy, divestiture or condition for this transaction. The companies' own filings nevertheless recognize that those outcomes are possible.

The companies have projected approximately $600 million in annual cost synergies, with about 90% expected within three years after closing.

PCI's earlier analysis noted a relevant coatings-industry precedent. Sherwin-Williams completed its 2017 acquisition of Valspar after the FTC required the divestiture of Valspar's North American industrial wood coatings business, which Axalta acquired.

What Should the Industry Watch Next?

The next meaningful disclosures will be procedural as well as substantive. They include whether AkzoNobel and Axalta say they have substantially complied with the FTC's Second Request, whether the CMA formally begins Phase 1, whether the European Commission publishes a formal notification and whether any agency or company identifies specific product markets or proposed remedies.

For the coatings industry, some important unanswered questions concern where AkzoNobel and Axalta compete most directly today, how readily customers can switch suppliers and whether any approval conditions would change the portfolio the companies presented when they announced the merger.