JSW Acquires Dulux Paints Business in a Major Deal

JSW Paints has announced a significant acquisition, securing a 75% stake in Akzo Nobel’s India unit for ₹9,407 crore (approximately $1.1 billion). This landmark deal positions JSW Paints as the fourth largest player in India’s paint industry, which is currently led by Asian Paints, Berger Paints, and Kansai Nerolac. The acquisition comes amid increasing competition in the sector, particularly with the recent entry of Aditya Birla Group’s Birla Opus in 2024. JSW Paints plans to further increase its stake through an open offer, aiming to solidify its presence in the market.

Details of the Acquisition

The acquisition of Akzo Nobel India marks a pivotal moment for JSW Paints, which was founded by steel magnate Sajjan Jindal in 2019. As part of the deal, JSW Paints will also make an open offer to acquire an additional 25% stake from public shareholders for ₹3,929 crore. This offer will allow public shareholders to receive ₹3,418 per share, while Akzo Nobel will receive ₹2,762 per share from JSW Paints. The completion of this transaction will ensure that JSW Paints maintains a 75% ownership stake in Akzo Nobel India, depending on the response to the open offer. Following the acquisition, JSW Paints will become the promoter of Akzo Nobel India, while the Dutch firm may retain its status as a public shareholder.

Market Implications

With this acquisition, JSW Paints is set to enhance its competitive edge in the Indian paint market. The company is part of the larger JSW Group, which has a valuation of $23 billion. The paint industry in India has been evolving rapidly, with new entrants like Birla Opus intensifying competition. The acquisition of Akzo Nobel India, which is known for its strong brand presence and product offerings, will allow JSW Paints to leverage existing market strengths and expand its portfolio. Akzo Nobel, a global leader in paint manufacturing, ranks fourth worldwide by market value and has a significant presence in India since its entry in 2008.

Future Plans for Akzo Nobel India

Despite the divestment of its decorative paints business in India, Akzo Nobel will continue to operate its powder coatings business and maintain a research center in the country. The company aims to streamline its operations and focus on its core coating business. Akzo Nobel’s CEO, Greg Poux-Guillaume, expressed pride in the brand’s performance in India and highlighted the transaction as a crucial step in executing the company’s strategic vision. Following the acquisition, Akzo Nobel India will enter into corporate brand and intellectual property licensing agreements with JSW Paints, ensuring continuity in brand identity and product offerings.

Financial Outlook

Akzo Nobel is expected to receive approximately €900 million in net cash proceeds from the deal. The company plans to allocate around €500 million to reduce its debt and initiate a €400 million share buyback program. This financial strategy reflects Akzo Nobel’s commitment to strengthening its balance sheet while continuing to invest in its core business areas. The acquisition is poised to reshape the competitive landscape of the Indian paint industry, with JSW Paints emerging as a formidable player in the market.

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