JSW Paints to buy Akzo Nobel India for Rs 8,986 crore
Akzo Nobel
India for Rs 8,986 crore, an over 17% discount to Thursday's price.
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.'
'Akzo Nobel India is home to some of the most globally renowned brands of paints & coatings like Dulux, International and Sikkens,' managing director Parth Jindal was quoted in a release. 'We are excited to welcome them to the JSW family,' he said.
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JSW Paints has trumped bids from a consortium of Indigo Paints and Advent International, and adhesive manufacturer Pidilite Industries, as it sought to fortify its presence in the industrial paints segment, where it will now be the second-largest after Kansai Nerolac India.
Morgan Stanley and Citi was the exclusive financial advisors for the deal.
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Apart from an approval from the Competition Commission of India, the deal will be subject to completion of a mandatory open offer to the shareholders of Akzo Nobel India.
The SEBI-mandated open offer will be for a 26% stake to be purchased from minority shareholders of the company. Depending on the success of the open offer – price will be in accordance to the Sebi formula based on Thursday closing price – JSW will buy proportionate shares from Akzo. It will not cross the 75% threshold, which means the Dutch company can potentially retain a small stake.
At 0942 IST, the shares were up nearly 6% at Rs 3,383.10/a piece on the BSE. After hitting a lifetime high of Rs 4,649/share in October last year, its shares have since seen correction, and are down nearly a third from their peak. Subdued demand conditions for the industry also weighed on the company's share prices as the sector saw annual demand fall for the first time in nearly three years amid higher competitive intensity. Akzo Nobel India has about a 7% market share in India currently.
Akzo Nobel India, which sells under the 'Dulux' brand in India, has completed seven decades of operations in the country.
'With JSW, we are confident the business is in the hands of a long-term partner with deep local expertise and strong ambitions in the sector,' Greg Poux-Guillaume, the chief executive officer of AkzoNobel said.
While JSW Paints, launched in 2019, was among the earliest conglomerates to foray in the paints sector, the company has not been able to garner substantial market share over the years. Five years after its launch, the company posted its first operating profit in fiscal 2024, on a revenue of Rs 2,000 crore.
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
The Aditya Birla Group's 'Birla Opus' meanwhile, commands a high single-digit market share in about a year since launching its operations in 2024. It is targeting a turnover of Rs 10,000 crore in three years of its operations.
Currently pegged at around Rs 80,000 – Rs 90,000 crore, the Indian paint industry is expected to clock in a 10-12% growth in volumes over the next few years, led by an impetus on housing and higher discretionary incomes.
As compared to paint companies which were stepping into the Indian market a few years back, the recent years have seen conglomerates enter the space.
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