Akzo Nobel NV

AkzoNobel is expected to offer divestments in its planned $25 billion purchase of Axalta Coating to try to allay concerns from European Union regulators. The remedies, expected to be filed next week with the European Commission, would involve the sale of certain overlapping businesses in the vehicle refinish market, according to a Bloomberg report on Thursday citing people familiar with the matter, while the EC's issues over the combination's impact on the powder coating markets have been dropped. The EC declined to comment to Bloomberg, and both AkzoNobel and Axalta didn't immediately respond to a request for comment. Separately, Reuters reported that EC regulators will approve the deal with the remedies, and the filing from the companies next week will extend the current EC's Oct. 22 deadline by 10 working days. The EC has until Oct. 22 to decide if it will approve the deal or open an in-depth probe. AkzoNobel said on Monday that it agreed to sell its Southeast Asian decorative paints business to Nippon Paint for $1.35 billion, concluding its strategic review of its Asian decorative paints portfolio, and Axalta in November announced an all-stock merger with AkzoNobel to create a global coatings company valued at approximately $25 billion.

Kasikorn Securities, citing Reuters, reported that on October 5, AkzoNobel announced an agreement to sell its architectural coatings business in Southeast Asia to Nippon Paint for 1.35 billion dollars, or about 45.48 billion baht. The sale covers decorative paint operations in Indonesia, Malaysia, Thailand, Singapore, Papua New Guinea, and Australia. The Indonesia portion of the deal is expected to close in late 2026, while the remaining countries are expected to complete in mid-2027. The brokerage views this news as slightly negative for TOA, as it causes the company to miss an opportunity to invest in expanding its market share both domestically and abroad, even though the company currently has a strong cash position of approximately 10 billion baht and almost no debt. Looking ahead, competition in the industry is not expected to intensify. In Thailand, TOA holds more than half of the market, while in overseas markets the reduction in the number of players should keep competitive conditions unchanged or even ease. Kasikorn Securities therefore continues to select TOA as one of its Top Picks, citing its attractive valuation, its position as market leader in paints, and earnings trends that are stronger than other construction materials stocks. It recommends buying with a target price of 19.0 baht, versus the current share price of 14.80 baht, implying a 2026/27 PER of only 10 times and 9.4 times, below the industry average of about 14 times. The brokerage believes the share price decline already reflects concerns over still-high energy costs, while the company has the ability to pass on higher costs and its earnings estimates already factor in these pressures. First-half 2026 profit accounted for 59% of the full-year profit forecast.

AkzoNobel said on Monday it has agreed to sell its Southeast Asian decorative paints business to Nippon Paint for $1.35 billion, concluding its strategic review of its Asian decorative paints portfolio. The sale covers decorative paints operations in Vietnam, Indonesia, Malaysia, Thailand, Singapore, Papua New Guinea, and Australia, the Dutch paints maker said, adding that it expects net cash proceeds of about $1 billion after tax and payments to minority partners. The Dulux paintmaker earlier divested its decorative paints operations in India and Pakistan for $1.6 billion and 50 million euros, respectively. The Indonesia deal is expected to close separately in late 2026, while the remaining transactions are expected to close around mid-2027. AkzoNobel said it will now focus on the successful closing of its merger with US coatings maker Axalta, which was announced last November.

The global automotive powder coatings market is projected to grow from USD 2.78 billion in 2026 to USD 3.59 billion by 2031, at a CAGR of 5.22% during the forecast period. Growth is driven by increasing vehicle production, rising demand for durable and high-quality surface protection, and growing adoption of low-VOC and environmentally friendly coating technologies. Increasing EV production is also creating new opportunities for powder coatings in battery systems and automotive components. Asia Pacific dominated the market in 2025, accounting for 56.2% of the market, supported by large-scale vehicle manufacturing and established automotive supply chains. Passenger cars accounted for 77.6% of the market in 2025, and thermoset is projected to register the fastest growth among resin types.

Axalta Coating Systems reported record adjusted EBITDA of $305 million and a multi-year high margin of 22.7% for the second quarter of 2026, driven by cost discipline and favorable mix. The Refinish segment grew 6% with 1,900 net new body shops added in the first half, while Mobility achieved record quarterly net sales of $474 million. The company maintained its full-year 2026 guidance and expects third-quarter adjusted EBITDA between $295 million and $305 million. A shareholder vote on the pending merger of equals with AkzoNobel is set for August 5, 2026, with closing targeted for late 2026 or early 2027, and management projects approximately $600 million in annual run-rate cost synergies from the deal.

AkzoNobel and Axalta have announced enhancements to the proposed governance arrangements for their combined company following their pending merger of equals. The changes include annual re-election of all directors after an initial three-year period, instead of the previously contemplated five-year period, and a two-thirds approval threshold for non-executive directors during the initial three years, down from 75%, for matters such as director appointments and dismissals, CEO and CFO appointments and removals, designation of chair and vice chair titles, and amendments to the remuneration policy. The companies stated that these refinements resulted from extensive engagement with shareholders and other stakeholders. The governance enhancements do not require changes to the proposed articles of association, and the extraordinary general meeting and special general meeting planned for August 5, 2026 will proceed as scheduled with existing agenda items unaffected.

Akzo Nobel reported second-quarter profit attributable to shareholders rose to 139 million euros from 124 million euros a year earlier, with earnings per share of 0.81 euros compared to 0.72 euros. Adjusted EBITDA increased to 398 million euros from 393 million euros, while revenue slipped to 2.59 billion euros from 2.63 billion euros. The company said it remains on track to achieve its full-year targets and expects to deliver 100 million euros of adjusted EBITDA improvement in constant currencies. CEO Greg Poux-Guillaume also noted that the merger with Axalta is progressing as planned, with a shareholder vote on August 5 and an expected closing at the end of 2026 or early 2027.

The Europe architectural coatings market is projected to grow from USD 20.93 billion in 2026 to USD 25.49 billion by 2031, at a compound annual growth rate of 4.0%. Growth is driven by extensive renovation and refurbishment activities, rising demand for energy-efficient and environmentally friendly coatings, and strong contributions from Germany. The façade segment, particularly External Thermal Insulation Composite Systems, is expected to lead the market, while professional applications dominate the end-use sector. Key players include AkzoNobel, PPG Industries, and The Sherwin-Williams Company.