Kerry Pianoforte, Editor12.04.17
The paint and coatings market experienced major consolidation in 2017, with more mergers expected in 2018.
According to a July 2017 article in our magazine, “Rivalry at the Top? Growing Concentration in the Coatings Industry:” The coatings industry in North America has been consolidating for decades, to the point that in certain end market segments, fewer than ten players – and in some cases, five or less – control over 90 percent of the market, and in most other markets, the level of concentration is at least 75 percent. For the industry in total, the American Coatings Association and ChemQuest Group have estimated that the top ten manufacturers represent nearly 75 percent of total industry revenues and that the next ten represent about another 10 percent of the market.
The Sherwin-Williams, Valspar merger made the most waves this year, knocking PPG from its number one position. According to a press release issued by S-W, the combined company generated pro forma 2016 revenues of $15.8 billion and employs approximately 60,000 people worldwide. It has a prominent market position in architectural paint in North America, South America, China, Australia and the UK. In industrial coatings, the combined company is a global market leader in packaging coatings, coil coatings, general industrial coatings and industrial wood coatings.
In March, PPG extended an unsolicited offer to acquire AkzoNobel for about $22 billion. Akzo’s board rejected that offer as too low, leading PPG to increase its offer twice more. The last offer, made at the end of April, valued the company at $27.1 billion. In October of this year, media reported that AkzoNobel was in talks with Axalta Coatings Systems regarding a potential merger of equals. The possible merger would create a $30 billion dollar company and would be the first major deal by Thierry Vanlancker, the company’s new CEO, who replaced Ton Büchner in July.
AkzoNobel also confirmed in the statement that its separation of Specialty Chemicals, including the return of the vast majority of net proceeds to shareholders, remains on track for April 2018 and is unaffected by these discussions.
As we head into 2018 it will be interesting to see how this will play out.
According to a July 2017 article in our magazine, “Rivalry at the Top? Growing Concentration in the Coatings Industry:” The coatings industry in North America has been consolidating for decades, to the point that in certain end market segments, fewer than ten players – and in some cases, five or less – control over 90 percent of the market, and in most other markets, the level of concentration is at least 75 percent. For the industry in total, the American Coatings Association and ChemQuest Group have estimated that the top ten manufacturers represent nearly 75 percent of total industry revenues and that the next ten represent about another 10 percent of the market.
The Sherwin-Williams, Valspar merger made the most waves this year, knocking PPG from its number one position. According to a press release issued by S-W, the combined company generated pro forma 2016 revenues of $15.8 billion and employs approximately 60,000 people worldwide. It has a prominent market position in architectural paint in North America, South America, China, Australia and the UK. In industrial coatings, the combined company is a global market leader in packaging coatings, coil coatings, general industrial coatings and industrial wood coatings.
In March, PPG extended an unsolicited offer to acquire AkzoNobel for about $22 billion. Akzo’s board rejected that offer as too low, leading PPG to increase its offer twice more. The last offer, made at the end of April, valued the company at $27.1 billion. In October of this year, media reported that AkzoNobel was in talks with Axalta Coatings Systems regarding a potential merger of equals. The possible merger would create a $30 billion dollar company and would be the first major deal by Thierry Vanlancker, the company’s new CEO, who replaced Ton Büchner in July.
AkzoNobel also confirmed in the statement that its separation of Specialty Chemicals, including the return of the vast majority of net proceeds to shareholders, remains on track for April 2018 and is unaffected by these discussions.
As we head into 2018 it will be interesting to see how this will play out.
