JSW to acquire Akzo Nobel for Rs 12K cr, to become 4th largest in paint industry

Sajjan Jindal’s JSW Paints on Friday announced acquisition of Dutch paint maker Akzo Nobel’s India unit in a Rs 12,915-crore deal to become the fourth-largest player in the paint industry in the country.

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JSW Paints will buy a 74.76 per cent stake in Dulux paint-maker Akzo Nobel India for Rs 8,986 crore and launch an open offer to buy another 25 per cent from open market for up to Rs 3,929.06 crore.

“JSW Paints today (Friday) entered into definitive agreements to acquire up to 74.76 per cent stake in Akzo Nobel India from Akzo Nobel NV and its affiliates, for a maximum consideration under the share purchase agreement of up to Rs 8,986 crore,” it said.

Akzo Nobel NV, in a global statement, said it has signed an agreement to sell its shareholding in Akzo Nobel India Ltd (ANIL) to the JSW Group.

“The transaction is based on a total enterprise value of approximately 1.4 billion euro, representing an EV/EBITDA multiple of 22x, and includes AkzoNobel’s liquid paints and coatings business in India,” it said.

However, the Dutch parent firm also said the India Powder Coatings business and International Research Centre, both currently part of ANIL, will be “retained by Akzo Nobel” under full ownership.

As of March, ANIL’s Dutch promoters group, which together held 74.76 per cent shareholding in the company, has exited the Indian decorative paints market, which saw entry of new players such as Aditya Birla Group, disrupting the Indian decorative paints industry with an investment of Rs 10,000 crore.

“The net cash proceeds are expected to be approximately 900 million euros of which around 500 million euros will be used for deleveraging. Following closing, Akzo Nobel intends to launch a 400 million-euro share buyback program,” the Dutch entity said.

Moreover, the deal is also subject to certain closing adjustments and regulatory approvals from the Competition Commission of India (CCI) and the completion of a mandatory open offer to the public shareholders of ANIL.

JSW Paints Ltd, with other group entities JTPM Metal Traders and JSW EduInfra, has also announced an open offer to acquire the remaining 25.24 per cent share of ANIL from the public shareholders.