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Axalta Plans North American Building Products Divestiture to Advance AkzoNobel Merger

Divesting of stocks, commodities, bonds or equities — Credit: filo / iStock via Getty Images Plus

Axalta Coating Systems plans to divest its North American Building Products business as part of the regulatory approval process for its proposed merger with AkzoNobel, according to an Oct. 20 filing with the U.S. Securities and Exchange Commission.

The Form 425 includes an internal communication from Axalta stating that the expected divestiture is intended to address regulatory requirements and support completion of the merger. Axalta said the planned sale is related to the merger review rather than the performance of the Building Products business.

The company said there are no immediate changes to employees’ roles, reporting relationships or day-to-day responsibilities as a result of the announcement. Axalta also said the proposed merger remains on track to close in the first quarter of 2027, subject to remaining regulatory approvals and other closing conditions.

The filing provides new detail on the remedies surrounding the proposed $25 billion combination. AkzoNobel and Axalta submitted commitments to the European Commission on Oct. 15, extending the preliminary EU review into November. The Commission has not publicly disclosed the contents of those commitments.

In an Oct. 21 Reuters report, AkzoNobel CEO Greg Poux-Guillaume said the companies are pursuing two divestitures to address regulatory requirements: AkzoNobel’s European vehicle-refinish business and an Axalta business Reuters described as its U.S. wood finishes operation. Poux-Guillaume told Reuters that regulators have not requested additional remedies beyond those two businesses.

Axalta’s SEC filing uses the formal designation North American Building Products business, while Reuters describes the operation as the U.S. wood finishes business. The publicly available information does not establish that those descriptions have identical geographic or product scope, so PCI is retaining Axalta’s terminology when referring to the planned divestiture.

The merger remains subject to regulatory approvals and other customary closing conditions. AkzoNobel and Axalta will continue operating as separate companies until the transaction closes.

The disclosure identifies another coatings business that could change ownership as regulators review the AkzoNobel-Axalta combination. PCI has been tracking the proposed remedies, which now appear poised to affect both European automotive refinish and Axalta’s North American building-products operations.

Follow PCI’s AkzoNobel-Axalta Merger Coverage