Axalta, the Philadelphia-based automobile paint and coatings maker, is set to be acquired by AkzoNobel NV, the Netherlands-based maker of Dulux and other paint and coatings brands, in an all-stock deal worth $6 billion.

Both companies have plants in the Philadelphia area, among other locations worldwide.

Axalta’s headquarters and central research lab is in South Philadelphia.

Akzo, which employs around 34,500, almost three times Axalta’s 12,600, last year promised to update its powder coatings plant near Reading. AkzoNobel also has a Sikkens vehicle refinishings plant near Malvern.

“The last few years have been really challenging,” Axalta CEO Chris Villavarayan told investors in a morning conference call. “The market has gone sideways at best. Coatings demand is still below 2019 levels. At some point there’s going to be some kind of recovery.”

He predicted sales will benefit as soon as next year as auto, shipbuilding, and other cyclical markets rebound, and that the merger will help boost sales of both companies’ products, after cutting costs.

AkzoNobel CEO Greg Poux-Guillaume will head the combined company, with sales totaling around $17 billion a year, across 160 countries. Poux-Guillaume said in the conference call that’s large enough to earn it a listing on the S&P 500, like rival PPG.

Poux-Guillaume said the combined company will maintain Axalta’s main office in Philadelphia as a second headquarters.

AkzoNobel shares slipped around 3% to around $54 in morning trading on news of the all-stock deal. Axalta shares were up 2% to around $29, still well below the $30 to $40 range where the stock traded last winter.

The deal, if completed on schedule by early 2027, ends years of Axalta merger talks that began soon after its 2013 spinoff by the DuPont Co., with Axalta periodically discussing possible deals with competitors including PPG and Kansai, as well as AkzoNobel.

“The stars have finally aligned for this longtime proposed transaction,” said Georgina Fraser, a stock analyst at Goldman Sachs, during the companies’ conference call with investors.

“The industrial logic has been very clear,” Poux-Guillaume said: combined, the company, whose new name hasn’t been chosen, can push more AkzoNobel products in the Americas and other areas where Axalta sales are concentrated, while Axalta paints can find bigger markets in Europe and Asia.

Axalta CEO Villavarayan will serve as deputy CEO in charge of cost-cutting $600 million from current expenses by 2030. Villavarayan said the company would also spend $400 million a year on research and development, enough “to drive growth.”

Rakesh Sachdev, a senior advisor at New Mountain Capital and Axalta’s chairman who served as interim CEO before Villavarayan took the job in 2022, will serve as chairman of the combined board, with four directors from each company and three outsiders. AkzoNobel shareholders will hold around 55% of the combined company’s shares.

“The Axalta Board is confident that this combination with AkzoNobel will create significant value for our shareholders,“ Sachdev said in a statement.

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