Dutch paint and coatings group AkzoNobel is to merge with its smaller US competitor Axalta, the companies announced on Tuesday.

AkzoNobel is the larger of the two based on market value and turnover, and its shareholders will receive 55% of the shares in the new company as well as a €2.5 billion special dividend.

The merged business will become a Dutch public company with dual headquarters in Amsterdam and Philadelphia. The combined business also plans to move its stock market listing to the United States.

Akzo Nobel chief Greg Poux-Guillaume will become chief executive of the combined group, while Axalta chairman Rakesh Sachdev will be chairman of the one-tier board.

The merger will create the world’s second-largest paints and coatings producer, with estimated annual sales of $17 billion (€14.6 billion), overtaking US competitor PPG.

AkzoNobel and Axalta have explored a tie-up before. A merger attempt in 2017 collapsed when Japanese group Nippon Paint stepped in, although that approach ultimately went nowhere. The two companies had also held talks several times in earlier years.

AkzoNobel has been active on the mergers and acquisitions front this year. The company sold its Indian subsidiary, generating €900 million in cash, and has said it will exit markets where it cannot secure a number-one or number-two position.

It also considered acquiring the coatings division recently spun off by German chemicals giant BASF, but the deal stalled because the sellers wanted cash rather than shares, the Financieele Dagblad reported.