The European Commission has conditionally approved the proposed $25 billion merger of Dutch coatings maker AkzoNobel and US-based Axalta Coating Systems, clearing the biggest regulatory hurdle for one of the largest deals in the paints industry.

The Commission approved the all-stock merger on 6 November, on condition that AkzoNobel sells its entire vehicle-refinish coatings business in the European Economic Area. The divestment includes a dedicated manufacturing site, intellectual property, staff and transitional services, and the buyer must already be active in coatings or a closely related industry.

Crucially, the companies may not complete the merger until the Commission approves the purchaser of the divested business. The condition is designed to preserve competition in the paints used by car-repair garages, where the two companies' operations overlap.

A $25 billion combination

The merger, announced in November 2025 as an all-stock merger of equals, is valued at about $25 billion including debt. Under the agreed terms, Axalta shareholders receive 0.6539 AkzoNobel shares for each Axalta share, leaving AkzoNobel shareholders with about 55 percent of the combined group and Axalta shareholders with 45 percent. Shareholders of both companies approved the deal on 5 August.

The combined group is expected to generate about $17 billion in annual revenue, serving automotive, aerospace, industrial and consumer markets. AkzoNobel chief executive Greg Poux-Guillaume is set to lead the merged company, with Axalta chief executive Chris Villavarayan as deputy.

Closing still to come

The Commission found no other competition concerns across the companies' businesses or geographic markets. The companies expect the merger to close in early 2027, subject to the remaining approvals. The UK Competition and Markets Authority has a deadline of 11 November for its initial decision, and Axalta has also agreed to sell its North American building products business to address regulatory requirements.