JSW Paints has made a major deal to acquire a 74% stake in Dutch-origin Akzo Nobel India for approximately ₹8,986 crore.
A significant change is set to occur in the Indian paint market. JSW Paints, the paint company of the JSW Group led by industrialist Sajjan Jindal, announced on Thursday that it is going to acquire a 74.76% stake in the multinational company Akzo Nobel India. This deal will be completed for approximately ₹8986 crore, or about $1.08 billion. With this deal, JSW Paints will gain ownership of the international brand Dulux in India.
From whom is the stake being purchased?
This deal has been made with the Dutch-origin company Akzo Nobel N.V. and its subsidiary companies. These companies held a majority stake in Akzo Nobel India. JSW Paints will now take control of the company by purchasing shares from them. This deal will be considered complete when all necessary regulatory approvals, especially the permission of the Competition Commission of India (CCI), are received.
JSW will also bring an open offer
According to the law, if a new buyer acquires more than 25% stake in any listed company, then they have to give an open offer to the remaining public shareholders as well. Under this rule, JSW Paints will now offer to sell shares to the other public shareholders of Akzo Nobel India.
The beginning will be with the Dulux brand
The most important part of this deal is JSW Paints getting control of the Dulux brand. Dulux is a well-known name worldwide for paints and coatings. In India too, this brand holds a good position in the premium segment of decorative paints. JSW Paints will work on a plan to further strengthen this brand in India.
Parth Jindal, Managing Director of JSW Paints, said that the paints and coatings sector is growing very rapidly in India, and with the recognition of Dulux, the company will be taken to new heights.
Competition will be tougher
Currently, the Indian paint market is dominated by giants like Asian Paints and Berger Paints. At the same time, companies like Grasim have also entered the paint business. In such a situation, the competition will intensify with this acquisition by JSW Paints.
With the Dulux brand, JSW will now be able to enter the premium segment directly and will rapidly increase its footprint in Tier-1 cities.
Akzo Nobel India's track record
Akzo Nobel India has been present in the Indian market for a long time. This company sells not only Dulux but also high-end brands like Sikkens. Apart from paints, it also has a b portfolio in industrial coatings.
Reacting to this deal, Greg Poux-Guillaume, CEO of Akzo Nobel N.V., said that in India, our business is now going into the hands of a group that has both local experience and a long-term vision.
Major impact on the Indian market
This deal will take India's paint sector in a new direction. Experts believe that the Indian paint industry can achieve double-digit growth in the next 10 years. The biggest reasons for this are the expansion of real estate, infrastructure projects, and the growing demand for decorative paints in rural areas.
JSW Paints wants to take advantage of this opportunity to strengthen its hold across the country, especially in South India and Tier-2 cities, where there are immense possibilities for paint companies.
JSW Paints' journey so far
JSW Paints started in 2019. It is a part of the JSW Group, which has a total turnover of more than $23 billion. The JSW Group is active in sectors like steel, cement, energy, infrastructure, and green mobility.
After entering the paint business, JSW Paints gradually increased its presence in the domestic market. The company's aim has been to become an all-India brand from the beginning. So far, the company has expanded its network from metro cities to rural areas.
What JSW Paints will get from the deal
- Indian rights of the Dulux brand
- The entire network of Akzo Nobel India
- Entry into industrial paints and coatings
- Access to dealers and retail chains across India
- Technical knowledge and R&D infrastructure
After this deal, JSW Paints will be able to get the technology and product innovation that was so far only available to the old big brands.
