AkzoNobel and Axalta announces merger of the titans creating an enterprise of about $25billion
Coatings industry giants, AkzoNobel and Axalta agreed to combine in an all-stock merger of equals to create a premier global coatings company having an enterprise value of approximately $25billion.
AkzoNobel and Axalta join hands
Coatings industry giants, AkzoNobel and Axalta agreed to combine in an all-stock merger of equals to create a premier global coatings company having an enterprise value of approximately $25billion. This deal of the giants is expected to influence the global paint and coating in a positive way, as it brings a combined business that will now have a highly attractive financial profile propelled with industry-leading innovation capabilities and a balanced global footprint extending over 160 countries to bring global possibilities to local customers.
The combined enterprise will generate roughly $17 billion in annual revenue with an overall valuation of about $25 billion. Greg Poux-Guillaume, Chief Executive Officer and Chairman of the Board of Management of AkzoNobel, “We’re excited to enter a new chapter in our long and proud history as a leader in the paints and coatings industry. This merger will allow us to accelerate our growth ambitions by bringing together highly complementary technologies, expertise and passionate people to unlock our full combined potential…”
Chris Villavarayan, CEO and President of Axalta, “We are pleased to enter into this transaction with AkzoNobel and join our best-in-class platforms to enhance innovation, develop new capabilities and further strengthen customer relationships. …. Together, AkzoNobel and Axalta are positioned to establish a profitable and sustainable path forward as a leader in the coatings industry. Like AkzoNobel, we value our people as our greatest asset, and we are excited to unite our rich, innovation focused cultures.”
Key strategic and financial take aways from the merger:
- The coatings industry to get a diversified and balanced portfolio of AkzoNobel’s and Axalta’s expertise. The global market will experience a full spectrum offering of coatings solutions, with first-rate franchises across Powder, Aerospace, Refinish, Mobility, Marine and Protective, Industrial Coatings and Decorative Paints.
- Combining Axalta’s Refinish, Light Vehicle and Commercial and Industrial Coatings businesses with AkzoNobel’s Powder Coatings, Refinish, Aerospace Coatings, Marine and Protective Coatings, Industrial Coatings and Decorative Paints businesses will create an innovative platform to deliver exceptional value to customers. The combined company will have approximately $400 million combined annual R&D spend, 91 R&D facilities for local customer needs, approximately 4,200 research fellows, scientists and engineers, and around 3,200 granted and pending patent applications
- The combination is expected to generate pre-tax run-rate synergies of approximately $600 million, with 90% of synergies expected to be achieved within the first three years following the close of the transaction.
- Highly attractive financial profile with strong margins and substantial cash flow generation. Revenues are expected to be approximately $17 billion, with Adjusted EBITDA of $3.3 billion and pro forma Adjusted Free Cash Flow of $1.5 billion.
Source: AkzoNobel
