JSW Paints buys Dulux-owner Akzo Nobel for Rs 9,000 cr, fresh coat of rivalry in over $10 bn market

Economic Times

6 hours ago

Akzo Nobel's India business, which operates under the 'Dulux' brand in the country, on Friday announced its decision to sell 74.7% stake for Rs 8,986 crore to JSW Paints, making the Jindal-owned paint-maker the fourth-largest player in India's highly competitive Rs 80,000 to Rs 90,000 crore paints market.After this deal, JSW will be required to make an open offer for further 26% stake in the company.ET in its May 26th edition was the first to report that JSW had agreed for the billion dollar acquisition – its largest so far and had entered in 'exclusive negotiations.' Under the agreement, the Dutch company will sell its stake through two promoter entities, Imperial Chemical Industries Ltd, which holds 50.46% of Akzo Nobel India and is classified as a holding/promoter entity and Akzo Nobel Coatings International B.V., which holds 24.30%, also classified as a holding/promoter entity.
Headed by Parth Jindal, the paint maker has trumped bids from a consortium of Indigo Paints and Advent International, and adhesive manufacturer Pidilite Industries to buy Dulux owner-Akzo Nobel.
JSW Paints splashes into the big league with Akzo NobelJSW Paints hasn't been able to break into the decorative top three since it was set up six years ago. On the other hand, newcomer Birla Opus, from Grasim Industries, has managed to gain a 3-4% market share in the third quarter alone.
Since Akzo Nobel India's Dulux Paints operates in the luxury and ultra-premium segments and has a strong presence in urban markets, the deal gives JSW Paints a powerful boost in both brand positioning and market reach. JSW Paints managing director Parth Jindal had described the Akzo Nobel India stake sale as an 'exciting opportunity' in January. 'There is no choice... I have to give everything I've got for Akzo Nobel India,' he had said at the time.
Following the deal, JSW Paints will strengthen its presence in the paints industry by emerging as the second-largest player in the industrial segment after Kansai Nerolac India, and securing the fourth spot in the decorative paints market.
AkzoNobel had announced plans to review its business operations in the Indian subcontinent in October 2024. In February, Akzo Nobel India hived off and agreed to sell its powder coatings business—its most profitable stream that contributes 12-14% of sales--to its Dutch parents. That took the shine off the deal for several potential suitors.
At an industry level, demand fell 4-5% in FY25. Akzo, like most in the industry, has been bracing for sectoral headwinds. The company has about 7% market share in India and is one of the most profitable in the segment, with an annual production capacity of 250 million litres, focused on high-end decorative paints with its Dulux brand. It experienced low single-digit growth in value in the December quarter while profit was down 5%, partly due to a special dividend issued in the previous year. The automotive and vehicle refinish segments faced challenges, hitting overall performance. Akzo, one of the largest paint companies in the world, has been slashing jobs and production, intensifying concerns about the resilience of European industry, as the continent struggles with rising energy costs following Russia's invasion of Ukraine. JSW is looking for significant gains. It turned profitable at an operating level for the first time in FY24, with an operating margin of 3%. An Akzo buy will inch it closer to third-placed Kansai Nerolac in the decorative segment.
India's Rs 90,000 paint market
India's Rs 90,000-crore paint market is currently dominated by major players such as Asian Paints, Birla Opus, Berger Paints, Kansai Nerolac, Indigo Paints, and Akzo Nobel India. A major disruption in this highly competitive space came with the entry of the Aditya Birla Group's Birla Opus, which launched operations in February 2024. In just about a year, it has already captured a high single-digit market share. According to Elara Capital, Birla Opus had nearly 7% market share by March 2025—eroding some of the dominance of market leader Asian Paints, which currently holds around 52%. To accelerate its expansion, Birla Opus is now targeting tier-2 and tier-3 markets through a franchise model, setting up compact 300–400 sq ft stores equipped with paint consultants and trained local entrepreneurs. It is also piloting PaintCraft Partner, a franchise-led painting services initiative. While Birla Opus is aggressively scaling up, the paint industry as a whole is facing headwinds. FY25 has been the most challenging year for the sector in nearly three decades, with business contracting. Asian Paints is down 4.2%, Kansai Nerolac has slipped 4.5%, while Berger Paints bucked the trend, rising 24%. For context, the Nifty 50 is up 6% so far this year. Unlike earlier years, when the Indian paint sector mostly saw the entry of traditional paint firms, recent times have witnessed the arrival of deep-pocketed conglomerates—intensifying the battle for market share and shaking up the status quo.