Mumbai: JSW Paints has agreed to acquire Akzo Nobel’s India business, valuing the company at Rs 12,000 crore (approximately $1.1 billion). This will make the paint-maker the fourth-largest in the now highly competitive domestic paints market, said people in the know. Ending months of negotiations, JSW has agreed to pick up 75% stake in the Akzo Nobel India for Rs 9,000 crore, a 17.4% discount to Thurday price.
A formal announcement is due before market opens today.
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.”
JSW and Akzo were not immediately available for comment.
The company helmed by Parth Jindal – 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.
Announcement of the acquisition will trigger an open offer 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.
On Thursday, Akzo Nobel shares closed at Rs Rs 3,213/share on BSE. Its current market capitalisation is Rs 14,632 crore, down 10.5% year to date.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.
Akzo Nobel India, which sells under the ‘Dulux’ brand in India, has completed seven decades of operations in the country, and currently has a market capitalisation of Rs 14,524 crore.
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.
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.
A formal announcement is due before market opens today.
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.”
JSW and Akzo were not immediately available for comment.
The company helmed by Parth Jindal – 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.
Announcement of the acquisition will trigger an open offer 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.
On Thursday, Akzo Nobel shares closed at Rs Rs 3,213/share on BSE. Its current market capitalisation is Rs 14,632 crore, down 10.5% year to date.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.
Akzo Nobel India, which sells under the ‘Dulux’ brand in India, has completed seven decades of operations in the country, and currently has a market capitalisation of Rs 14,524 crore.
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.
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.
You may also like
Zohran Mamdani: Republicans target Indian-origin candidate for New York mayor with racist remarks | Who said what
Why is raw onion important for men? 99% don't know the right way to eat it, with honey and...
Jailed gangster Bhagwanpuria's mother shot dead in Punjab's Batala
'All because of one family ...': Jaishankar slams Congress over Emergency; quotes 'Kissa Kursi Ka' in sharp attack
Security Forces Conduct Search Operation in Udhampur to Capture JeM Terrorists
