AkzoNobel is holding merger talks with coatings maker

AkzoNobel has confirmed it is currently in constructive discussions regarding a merger of the AkzoNobel Paints & Coatings business with coatings manufacturer Axalta.

The Ashington factory will be capable of doubling current UK production levels to 200 million litres per year, the equivalent of 80 million 2.5 litre cans of Dulux – image courtesy of AkzoNobel.
AkzoNobel confirms that its separation of Specialty Chemicals – image courtesy of AkzoNobel.

AkzoNobel has announced it was in talks about a merger of equals in what would be the first major deal by chief executive Thierry Vanlancker.

Vanlancker took over in July after Akzo spurned a €26bn ($30.2bn) offer from U.S. rival PPG Industries.

According to Reuters, the disclosure followed reports on Friday that linked the Dutch company to an approach, sending shares in Axalta soaring to give it a market value of more than $8bn.

Axalta said it was engaged in talks, but cautioned that there was no certainty that a definitive agreement between the parties will be reached.

According to analysts, a deal would bring together the third and fourth-largest players in the $130bn global coatings market. Coatings are used to protect surfaces from corrosion and wear in a wide range of industries.

However, AkzoNobel confirms that its separation of Specialty Chemicals, including the return of the vast majority of net proceeds to shareholders, remains on track for April 2018 and is unaffected by these discussions.

Even after the planned sale of its chemicals divisions, valued at  €8-10bn, the Dutch group would tower over its prospective partner, suggesting a lead role that typically results in a premium being offered to the junior partner, as reported by Reuters.

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