AkzoNobel , Axalta gain conditional EU antitrust approval for $25 billion merger

AkzoNobel and Axalta Receive Conditional EU Approval for $25 Billion Merger

EU Approval and Conditions for AkzoNobel-Axalta Merger

By Foo Yun Chee

Background of the Merger

BRUSSELS, Nov 6 (Reuters) - Dulux paint maker Akzonobel and U.S. peer Axalta have secured EU approval for their $25 bln merger after agreeing to sell assets in Europe to address competition concerns, EU antitrust regulators said on Friday.

The companies announced the deal in November last year, part of a wave of consolidation in the sector which faces rising costs and uncertainties created by U.S. tariffs.

Divestment Requirements and Market Impact

Asset Divestiture to Address Competition Concerns

AkzoNobel will divest its vehicle refinish coatings business in Europe to address concerns about the merged company's very strong market power that could lead to price hikes for repair garages and consumers, the European Commission, which is the EU competition authority, said.

What Are Vehicle Refinish Coatings?

Vehicle refinish coatings are the liquid paint used to repair dented or weathered cars.

Regulatory Statements and Consumer Protection

"The commitments that AkzoNobel and Axalta offered in the context of their merger assure that companies in this market do not extract high margins from car repairs by increasing prices or lowering quality to the detriment of consumers who rely on their cars for their everyday life," EU antitrust chief Teresa Ribera said in a statement.

Buyer Requirements for Divested Assets

The companies are required to find a buyer in the supply of coatings or an industrial player in a related industry.

Industry Context and Competitors

Reuters reported last month that the deal would win EU clearance on condition that AkzoNobel sells its vehicle refinish business.

Axalta exclusively makes coatings, with a strong presence in the US market. Rivals to the companies include BASF's coatings business, Nippon Paint, Sherwin-Williams and Kansai Nerolac.

(Reporting by Foo Yun Chee)