AkzoNobel sale in India; JSW Paints among front runners to buy

Thursday, 20 February 2025 00:00 - - {{hitsCtrl.values.hits}}

Amsterdam-based paint-maker AkzoNobel has closed bid offers for sale or stake-offload for its India unit – AkzoNobel India – with at least two Mumbai-based entities emerging as front runners.

Sajjan Jindal’s JSW Paints, in partnership with private-equity firm TPG, and speciality chemical-maker Pidilite Industries are the two top names in the bids. The former has also received a call to discuss deal details at the Dutch headquarters of the paint-maker, sources aware told BusinessLine.

Other companies who had expressed interest in bidding include Berger Paints. Indigo Paints, too, was amongst the probables.

Sources said bids were placed in the last week of January – “some 10-15 days back” – and the process “is now closed.” Citi is the merchant banker for the Dutch entity.

“One of the prospective bidders, most likely JSW Paints, has been called and was supposed to be in Amsterdam for preliminary discussions. There is no update so far on this. While bids have closed, the deal process is yet to be finalised,” said a person in the know.

AkzoNobel India refused to comment on the matter. JSW Paints, too, did not respond to queries by BusinessLine.

AkzoNobel NV CEO Greg Poux-Guillaume during a recent investor call said the company was exploring options to strengthen their business in India, “which could range from a joint venture to a full disposal.” The powder business is being carved out to facilitate discussions, as it is a key asset with differentiated technology, he added.

The Dutch entity holds over 74% stake in AkzoNobel India.

Another person aware of the deal discussions said a “premium valuation” is being looked at for the Indian entity of the Dutch paint-maker. In all likelihood, the company could be valued “at least 5-odd times over its India turnover.” This roughly works out to be in the INR 16,000-20,000 crore range.

The premium valuation, market sources said, is for the “Dulux brand” that the company owns in India; apart from its top-end positioning and distribution reach. It is amongst the top four brands in the country, despite Asian Paints and Berger having a near 75% market share together.

AkzoNobel India currently has a market cap of INR 16,500 crore-odd; with share price hovering around the INR 3,636 range.

JSW Paints, in partnership with TPG, entered the fray last month as a part of its inorganic expansion strategy. JM Financial is one of the multiple merchant bankers, sources said.

Pidilite MD-designate Sudhanshu Vats, post its Q3 results, said the company will continue to look for “partnerships and acquisitions.” For the company, too, paints is seen as a logical extension.

With regards to Akzo, Vats said: “We would not like to comment on any speculation. At this point in time, I have nothing to share on this. We continuously look at opportunities. This is an ongoing process. You have seen our track record over the last five to seven years. We have done some very successful partnerships and acquisitions. So, this is something which we keep doing.”

The company is yet to respond to specific queries. Berger MD Abhijit Roy did not take calls.

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