9 hours ago
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- Business Recorder
JSW strengthens India paints push with $1.6 billion Akzo Nobel unit deal
BENGALURU: JSW Paints will buy Dutch paint maker Akzo Nobel's Indian arm for about $1.6 billion, in what will be the country's biggest deal yet in the sector as competition intensifies between established players and new entrants.
The deal comes as challenges for Indian paint makers mount, including volatile raw material costs and heightened competition, with billionaire Kumar Mangalam Birla's entry into the sector last year eating into Asian Paints' market share.
Dulux Paint-owner Akzo Nobel had announced a review of its South Asia operations last year to rein in costs and boost its core coatings business.
Shares of Akzo Nobel India jumped more than 11% after the deal was announced, and were trading 7.6% higher in Mumbai at around 0830 GMT.
India's paint and coatings market is expected to reach $16.37 billion in size by 2030, Mordor Intelligence estimates, from $10.46 billion in 2025, driven by a boom in infrastructure and real estate development.
The deal, which includes debt, will be the Indian paint sector's biggest deal on record, Dealogic data showed.
JSW Paints, launched in 2019 and part of the $23 billion JSW Group, will buy a 74.76% stake in Akzo Nobel India for $1.05 billion and launch an open offer for the roughly 25% held by public shareholders.
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Parent Akzo Nobel, the fourth-largest paint maker in the world by market capitalisation behind PPG, Nippon Paint and Sherwin-Williams, will continue to retain its research and development centre and powder coatings business in India.
Growing competition
Once completed, the deal will propel JSW Paints to fourth place by market share in a sector dominated by Asian Paints , Berger Paints and Kansai Nerolac, according to Geojit Financial Services analyst Antu Thomas.
Birla-owned Grasim launched Birla Opus in 2024, crowding the already-competitive market. Birla has since filed an antitrust complaint against Asian Paints for allegedly abusing its market position, Reuters has reported.
In 2022, the competition regulator closed a case filed by JSW Paints against Asian Paints for abusing its market position, saying it found no breach of competition laws.
'While this acquisition offers JSW Paints a significant scale-up opportunity, near-term integration challenges could provide an opportunity for incumbent players to strengthen their market position in the luxury segment,' Amit Purohit, vice president at Elara Capital said.
Akzo Nobel is likely to rake in 900 million euros in net proceeds and plans to launch a 400 million euro share buyback program after the deal's closing, which is expected in the fourth quarter of 2025.
