Artisan Partners Global Value Releases Statement on Axalta

MILWAUKEE, Nov. 19, 2025 (GLOBE NEWSWIRE) -- The Artisan Partners Global Value Team, which manages approximately $35 billion in discretionary investment client assets, today released a statement regarding the proposed merger of Akzo Nobel N.V. and Axalta Coating Systems Ltd. (NYSE:AXTA). Client accounts managed by the Global Value team hold roughly 1.4 million shares of Axalta common stock. The full text of the statement is as follows:

Yesterday, Akzo Nobel N.V. and Axalta Coating Systems Ltd. announced they had entered into a definitive agreement to combine in an all-stock "merger of equals."

This strikes me as an about-face so severe that I wonder if the members of the Axalta Board of Directors need neck braces. I know I need one.

Less than a month ago, on the third quarter conference call, CEO Chris Villavarayan and CFO Carl Anderson noted the exceptional financial performance of Axalta even in the face of industry headwinds, a likely improvement in operating conditions in 2026 and a valuation so attractive, it made sense to allocate all free cash flow to share repurchases.

On that call, Chris said, and I quote directly:

• This marks 12 consecutive quarters of adjusted EBITDA and adjusted EBITDA margin growth year over year.
• Net leverage was maintained at 2.5x, remaining the lowest in Axalta's history.
• In the fourth quarter we expect to accelerate our share repurchase strategy by repurchasing up to $250m of our stock. Upon completion, we would have deployed over 90% of our free cash flow to share repurchases this year.
• We expect to deliver record adjusted diluted earnings per share and adjusted EBITDA.
• Next year we're planning for an improved Refinish demand environment in North America as claims stabilize and destocking headwinds abate. We continue to gain new body shops and are excited about our growth opportunities.
• The leading indicators (for Refinish) are starting to turn positive.
• So I think the right market environment is starting to switch. So I certainly believe '26 will be a different place as we start the year for Refinish.
• We expect to repurchase a significant amount of Axalta stock given my confidence on where we can take the business in the years to come. I'm more excited than ever.
• The good news is really the multiple that BASF was sold for. It really shows the valuation that the – let's call it, that Axalta is undervalued. And I think going back to Carl's comments, this is why we're doubling down on buying 90% of our free cash flow, using that to buy back shares.
  
  
  
  

Carl said:

• We continue to see just tremendous value of repurchasing shares at this point.
• Again, where our trading multiples are right now, M&A is a little bit more challenging.
• We have a big belief in where we can continue to take this company as it relates to earnings, and what the future will bring.
  
  
  
  

Actually, never mind all that. Let's just go ahead and sell the company to Akzo Nobel for 10x earnings. We are struggling to comprehend what is happening here. Axalta and Akzo Nobel are calling this a "merger of equals," but let's call it what it really is: selling out of a cheap business that is performing well and taking the currency of a company that has never done well, one that has far inferior assets and financial performance.

Akzo Nobel is notable only in its track record of value stagnation. The numbers speak for themselves. This is a company whose earnings and adjusted earnings per share are lower over one-, five- and ten-year periods. The only thing growing at Akzo Nobel is the suffering of its owners.

To be abundantly clear, this is the currency which shareholders are being asked to accept and the rickety wagon to which we are being asked to hitch the majority of our investment going forward.

							YTD
			2015	2019		2024	2024	2025
Revenue			€ 14,859	€ 9,276		€ 10,711	€ 8,092	€ 7,786
Operating Income			1,573	841		917	790	377
Net Income			1,060	555		592	556	66
Free Cash flow			518	(168	)	367	83	244
FCF per share			2.07	(0.79	)	2.15	0.49	1.43
net debt			1,226	802		4,066	4,069	4,028
adj. EPS			4.02	3.10		3.88	3.33	3.07
Source: Akzo Nobel Annual Reports

As an Axalta shareholder, we believe the only proper response to this proposed transaction is an absolute and resounding "NO." Should any other buyers be interested in stepping forward at a price that comes closer than 3,240 miles (the distance between Amsterdam and Philadelphia) to fair value, we would be very interested in having a conversation.

The Artisan Partners Global Value Team is led by Daniel O'Keefe, Managing Director, and Michael McKinnon, Managing Director.

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