April 30, 2025 – AkzoNobel Eyes BASF’s Divested Coatings Business: A Game-Changer in the Global Coatings Industry?
A bombshell was dropped in the global coatings industry on April 27, as reported by the Dutch financial daily Het Financieele Dagblad. AkzoNobel, the Amsterdam-based coatings behemoth, is reportedly eyeing the coatings business unit that German chemical titan BASF plans to divest, according to three anonymous sources. This revelation has sent shockwaves through the industry, sparking intense speculation and debate.
BASF’s intention to divest its coatings business has been in the works for some time. In December 2023, BASF announced the spin-off of its agricultural solutions, battery materials, and coatings businesses. Then, in September 2024, with the launch of its new “Way to Win” strategy, the coatings business was categorized under the “independent business” segment, fueling market rumors about a potential sale. The divestment process took a significant step forward on February 17, 2025, when BASF reached an agreement with Sherwin-Williams to sell its Brazilian architectural coatings business for $1.15 billion, allowing it to refocus on areas like automotive coatings. By the end of March, BASF had hired Bank of America and JPMorgan Chase to advise on the sale of its coatings business, signaling that the divestment process is well underway.
AkzoNobel’s interest in this potential deal is driven by strategic considerations. AkzoNobel’s 2024 financial report shows that its business mainly consists of high-performance coatings and decorative paints. Although its automotive and specialty coatings business generated €1.434 billion in sales, it faced significant headwinds in the second half of 2024 in the European and American markets due to global market volatility. Compared with industry peers like PPG and BASF, AkzoNobel has substantial room for growth in the automotive coatings segment. As one of the world’s top automotive coatings manufacturers, BASF’s business aligns closely with AkzoNobel’s, and an acquisition could potentially catapult AkzoNobel to greater prominence in the global automotive coatings market.
According to the Color Masterbatch Industry Network, AkzoNobel is also gearing up for a possible acquisition. The current CEO has extensive experience in capital operations, and the company’s supervisory board is in the process of seeking a new CFO with strong M&A capabilities. Additionally, AkzoNobel is in the process of divesting its Indian business. The sale of its South Asian decorative coatings business is expected to yield €1.3 billion. While this amount is still far from BASF’s coatings business, which is valued at around €6 billion, it does provide some financial ammunition for the potential acquisition. However, before proceeding, AkzoNobel first needs to win over its shareholders, as this could be the company’s largest acquisition in 18 years.
Once BASF formally puts its coatings business up for sale, it is likely to attract a flurry of interest from industry heavyweights and private equity firms. Companies like Sherwin-Williams and Nippon Paint, which have been active in the M&A market, as well as deep-pocketed investment firms, are expected to join the fray. Whether AkzoNobel can outmaneuver its competitors and successfully acquire BASF’s coatings business remains to be seen. The industry will be watching closely as this high-stakes drama unfolds.