EU approves AkzoNobel-Axalta merger if car repair paint is sold

The European Commission has conditionally approved the merger of paint companies AkzoNobel and Axalta. Before the deal can be completed, the Dutch multinational must divest its car refinish activities in Europe, the paints used to repair damaged vehicles.

The Commission feared the merger would harm competition in the market for paints used to repair damaged cars.

The Commission said garages find it hard to switch supplier because they use their current supplier's scanning and mixing equipment. That could mean higher prices for garages and, in the end, for motorists. The Commission explained how the equipment is used: “The right colour is found with advanced scanning techniques and by looking up the colour in colour databases. Garages do this themselves with equipment from the coating suppliers.”

To meet these objections, AkzoNobel offered to sell its European car refinish business in full, including one production site, intellectual property and staff. The buyer, who has yet to be found, must already be active in coatings or a related sector. The merger can only be finalised after the Commission has approved a suitable buyer.

Teresa Ribera, executive vice-president of the Commission, said: “European consumers already face rising prices for mobility and transport. For commuters and families, affordable car repairs are important to keep the car roadworthy throughout its whole life.”

According to Ribera, the commitments should prevent firms in the car refinish paint market from raising their margins, pushing up prices or lowering quality at consumers' expense.