PHILADELPHIA, PA — Akzo Nobel N.V. and Axalta Coating Systems Ltd. revised governance terms for their pending all-share merger after shareholder feedback, shortening a protected board period and lowering approval thresholds ahead of Aug. 5 votes on the transaction.
Under the revised framework, all directors of the combined coatings company would face annual re-election after an initial three-year period following completion of the merger. The companies previously planned to begin annual elections after five years.
During that initial three-year period, certain board actions would require approval from two-thirds of the non-executive directors, down from a previously proposed 75% threshold.
The requirement would apply to proposals involving the appointment or dismissal of directors, the selection or removal of the chief executive officer, deputy chief executive officer and chief financial officer, the designation of chair and vice chair roles, and changes to the remuneration policy.
The revisions follow discussions with shareholders and other stakeholders about oversight of the combined company, AkzoNobel and Axalta stated.
“We believe these changes reinforce our commitment to strong corporate governance and effective board oversight,” Axalta Chairman Rakesh Sachdev stated.
AkzoNobel Supervisory Board Chairman Ben Noteboom attributed the changes to shareholder engagement and stated that the revised structure would more closely align the combined company’s governance with investor interests.
The companies stated that the adjustments do not require amendments to the proposed articles of association.
AkzoNobel’s extraordinary general meeting and Axalta’s special general meeting will proceed Aug. 5 with their existing agendas unchanged.
The proposed merger would combine two global paint and coatings manufacturers. AkzoNobel operates in more than 150 countries, while Philadelphia-based Axalta serves customers in automotive, industrial and other coatings markets across more than 140 countries.
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