AkzoNobel discussing merger with U.S. paint producer Axalta
AkzoNobel and American paint manufacturer Axalta are conducting "constructive talks" on a possible merger, the Dutch company announced in a short press release on Monday. According to AkzoNobel, this is not an acquisition, but rather a "merger of equals", RTL Nieuws reports.
The Dutch company consists of a paint division and a chemical division. AkzoNobel plans to sell off the chemical division early in next year. The remaining paint division will then merge with Axalta, if all goes according to plan.
AkzoNobel and Axalta previously considered merging, but this is the most concrete that these plans ever were. Axalta has a market value of 8 billion dollars. After persistent rumors about the merger on Friday, Axalta's shares jumped nearly 17 percent on the U.S. stock market, according to the broadcaster.
Axalta primarily produces paint for the automotive industry. An interesting point is that Thierry Vanlancker - who recently took over as AkzoNobel CEO - was previously the CEO of the American Du Pont car painting division. That division was sold to investor Carlyle in 2013 and renamed Axalta, according to RTL.
This year has already been quite tumultuous for AkzoNobel. In the first half of 2017, the Dutch company had to fend off acquisition attempts by American company PPG. PPG eventually withdrew its bid and recently said that it lost interest in AkzoNobel.
AkzoNobel's refusal of the PPG bid caused unrest among many of its shareholders, especially because PPG's bid was significantly higher than AkzoNobel's stock price. So shareholders saw a good return on their investment disappear before their eyes. That caused a seriously damaged relationship with shareholder Elliot Advisors. Calm eventually returned after AkzoNobel promised to sell off its chemical division and appoint a new CEO in consultation with Elliott, according to RTL.
