AkzoNobel, Axalta merger faces UK antitrust test in refinish coatings market
UK competition scrutiny is intensifying for AkzoNobel's planned $25 billion merger with Axalta as regulators assess its effect on vehicle refinish coatings. The companies now have until November 18 to propose remedies or risk a more detailed Phase 2 investigation.
Highlights
- UK Competition and Markets Authority warns AkzoNobel-Axalta merger would create a dominant 40%-50% share in vehicle refinish coatings, raising competition concerns.
- The CMA sets a November 18 deadline for AkzoNobel and Axalta to propose remedies or face a Phase 2 in-depth investigation.
- European Union approved the merger last week after AkzoNobel agreed to divest its vehicle refinish coatings business in Europe and the UK.
UK regulator sets remedy deadline
As reported by Reuters, citing the Competition and Markets Authority, the watchdog's initial review finds the deal raises competition concerns in the UK market for vehicle refinish coatings, used by repair centres and bodyshops to fix and repaint damaged vehicles.The CMA says the merger would create a clear market leader in the UK, with a combined share of 40% to 50% of supply. It adds that AkzoNobel and Axalta compete closely through similar product ranges, technical support and extensive approvals from vehicle manufacturers and insurers, meaning the loss of one rival could result in higher prices or weaker quality and support for customers.
The regulator gives the companies until November 18 to offer remedies. If they do not satisfy those concerns, the transaction faces an in-depth Phase 2 probe.
EU approval shapes companies' response
The merger was announced in November last year amid broader consolidation in the coatings sector, which faces rising costs and uncertainty linked to U.S. tariffs.AkzoNobel and Axalta say in a statement they aim to address the CMA's concerns with the same remedy proposal used in the European Commission process. The companies reiterate they remain confident of completing the merger by early 2027.
The European Union cleared the deal last week after AkzoNobel agreed to sell its vehicle refinish coatings business in Europe and the UK to resolve competition concerns.
As noted in our earlier article, Equites UK exit accelerated after the Aviva portfolio sale boosted liquidity and lifted its interim distribution.
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