Pidilite, Indigo Paints and JSW Paints are speculated to be interested in 74.76% stake of Akzo Nobel in it’s Indian subsidiary.
Talks with Adani and Aditya Birla Group didn’t proceed much.
- Valuations are expected to be $2.1-2.5 bn (Rs 18,000 – 21,000 cr against the current mcap of Rs 17,000 cr).
- Key draw is Akzo’s established Dulux brand in the decorative paints business.
- Akzo has around 5-6% overall market share of Indian paints and 15-17% of the premium segment
- Pidilite entered in the paints industry in 2023. It is speculated to be offering share swap for the acquisition.
- Indigo and JSW are speculated to be offering full cash and are exploring the acquisition along with the PE majors.
Reason for sale by Akzo
The increasing competition.
Akzo Nobel NV held a strategic review of its South Asia businesses earlier this year. Due to the increasing competition, the initial plan was to partner with a larger paintmaker in India.
Recently however, the Dutch firm was speculated to have hired Citigroup for the sale.
As per latest reports, JSW Paints is competing with a consortium of Advent International and Indigo Paints to acquire Akzo Nobel India.
The third contender, Pidilite Industries, which chiefly wants only Akzo’s decorative business, is also believed to be in the fray, but has not made an aggressive bid.
https://economictimes.indiatimes.com/industry/cons-products/paints/dulux-duel-jsw-paints-advent-indigo-in-race-to-acquire-akzo-india/articleshow/120562199.cms?from=mdr
As per newspaper reports, JSW Paints consortium has outbid Indigo paints.
The two are speculated to have signed an exclusivity agreement for bilateral negotiations to finalise terms and documentation for a share purchase agreement before making a formal announcement.
https://economictimes.indiatimes.com/industry/cons-products/paints/jsw-paints-set-to-add-lustre-with-akzo-india-buy/articleshow/121192530.cms?from=mdr
JSW Paints has finalised the deal to acquire entire promoter shareholding of 74.76% shareholding for Rs 9,403 cr.
In parallel, it has also made open offer to acquire balance 25.24% @ Rs 3,414.77/ share aggregating to further Rs 3,929 cr.
Open offer price is at 7% premium to the previous day’s price.