AkzoNobel and Axalta have announced changes to the governance framework for their proposed combined company following shareholder feedback, ahead of merger votes scheduled for Aug. 5.
The companies said the updates follow discussions with shareholders and other stakeholders after announcing their proposed all-share merger of equals.
"We are pleased to announce these governance enhancements following constructive engagement with our shareholders," said Rakesh Sachdev, chair of Axalta's board of directors. "We believe these changes reinforce our commitment to strong corporate governance and effective Board oversight while further strengthening the governance framework of the combined company. We appreciate the feedback we've received throughout this process and remain confident that this combination will create a premier global coatings company that delivers significant long-term value for all shareholders."
Among the changes, all directors will stand for annual re-election after an initial three-year period following completion of the merger, rather than after five years as originally proposed.
The companies also lowered the approval threshold required from non-executive directors during the initial three-year period after completion. A two-thirds majority, instead of the previously proposed 75 percent, will apply to decisions including proposals on the appointment and dismissal of directors, the appointment and removal of the CEO, deputy CEO and CFO, designation of the chair and vice chair titles and amendments to the remuneration policy.
The companies said the governance enhancements do not require changes to the proposed articles of association for the combined company. As a result, the AkzoNobel extraordinary general meeting and Axalta special general meeting will proceed as planned on Aug. 5, with existing agenda items unchanged.
