No Deal for Axalta and Akzo Nobel

From the WSJ:

Akzo Nobel and U.S. rival Axalta Coating Systems said Tuesday they abandoned talks to merge after failing to agree on terms for the proposed tie-up.

The companies didn’t detail reasons for the collapse. The Wall Street Journal first reported that the talks had ended.

The deal would have created a multibillion-dollar paints and coatings giant. Industries ranging from automotive to mining use coatings to prevent corrosion and improve durability.

The combination of the two companies could have boosted profit growth by lowering raw material costs, eliminating overlapping operations, expanding the combined entity’s products and adding new customers.

Now Akzo and Axalta face that challenge as separate companies at a time of rising raw material costs and sluggish demand. In the third quarter, Amsterdam-based Akzo reported a 13% drop in adjusted operating profit, hurt in part by higher raw material costs. Meanwhile, Axalta posted a 20% drop in adjusted net income in the same period, amid lower volumes in North America.

“We remain focused on our strategic options…to improve profitability in the future,” Thierry Vanlancker, Akzo Nobel’s chief executive, said in a statement.

Posted by on November 21st, 2017 at 6:02 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.