AKZA Akzo Nobel NV

By Ben Dummett 

Akzo Nobel NV and U.S. rival Axalta Coating Systems have abandoned their merger talks after failing to reach an agreement on terms around structuring the deal and other issues, according to a person familiar with the matter.

The deal would have created a multibillion-dollar paints and coatings giant. Industries ranging from automotive to mining use coatings to prevent corrosion and improve durability.

The combination of the two companies could have boosted profit growth by lowering raw material costs, eliminating overlapping operations, expanding the combined entity's products and adding new customers.

Now Akzo and Axalta face that challenge as separate companies at a time of rising raw material costs and sluggish demand. In the third quarter, Amsterdam-based Akzo reported a 13% drop in adjusted operating profit, hurt in part by higher raw material costs. Meanwhile, Axalta posted a 20% drop in adjusted net income in the same period, amid lower volumes in North America.

(END) Dow Jones Newswires

November 21, 2017 16:28 ET (21:28 GMT)

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