Dutch paints and coatings maker Akzo Nobel, under pressure after rejecting a lucrative takeover offer and then issuing two profit warnings, said it was in talks to buy U.S. rival Axalta Coating Systems Ltd. The merger could create a $30 billion company. Ciara Lee reports.
So far this year Dutch paint maker Akzo Nobel has rejected a 26 billion euro takeover and issued two profit warnings. It then faced lawsuits from angry shareholders over the decision to spurn US rival PPG Industries. So it's no surprise that Akzo might be under pressure to find another potential suitor. Enter U.S. firm Axalta Coating Systems. The two are in merger talks to create a 30 billion dollar company. (SOUNDBITE) (English) SENIOR MARKET ANALYST, LONDON CAPITAL GROUP, JASPER LAWLER, SAYING: "There's a been a three month respite now in terms of the legal proceedings between its shareholders and the company, and perhaps this deal goes some way to explain why there was that respite. It seems like some of the management are stepping aside and this suggests that there is a bit more of an openness towards doing deals." It would be the first major deal for new Chief Executive Thierry Vanlancker. Reuters reported on Friday that Akzo had approached Axalta about a merger, sending Axalta's shares 17 percent higher Akzo has a market capitalization of around 22.7 billion dollars while Axalta is worth around 8.1 billion. But Axalta truck coatings business would help fill a hole in Akzo's portfolio. And, it says, create a leading global paints company.