Akzo Nobel India accepts binding offer from promoter firm for powder coating & r&d biz

The said binding offer also includes sale and transfer of the intellectual property for the Decorative Paints business by Akzo Nobel Coatings International B.V. to Akzo Nobel India Limited.

'Dulux' paintmaker  Akzo Nobel India Limited in a late-night announcement on Monday has confirmed that its Board of Directors has received a binding offer from Akzo Nobel N.V. (the ultimate promoter/holding company), with customary conditions to acquire the company’s powder coatings business and International Research Centre (R&D).

The said binding offer also includes the sale and transfer of the intellectual property for the Decorative Paints business by Akzo Nobel Coatings International B.V. to Akzo Nobel India Limited.

The release said that further to the receipt of the said binding offer, the Board of Directors of Akzo Nobel India, in its meeting held today, has accepted that "the sale and transfer of Akzo Nobel India Limited’s Powder Coatings business and the International Research Center (R&D) on a slump sale basis as a going concern. Each of the aforesaid slump sale transactions will be undertaken through separate Business Transfer Agreements with an indirect wholly owned subsidiary of Akzo Nobel N.V, which is proposed to be incorporated in India, for a purchase consideration of Rs 20,730 million and Rs 700 million, respectively," the company said.

"The acquisition of intellectual property rights of Akzo Nobel Coatings International B.V. by Akzo Nobel India Limited pertaining to the Decorative Paints business in India, Bangladesh, Bhutan and Nepal. This transaction will be executed through an Intellectual Property Sale and Transfer Arrangement with Akzo Nobel Coatings International B.V. for a purchase consideration of Rs 11,520 million," the statement further said

"These transactions will make Akzo Nobel India Limited a more focused liquid paints and coatings business and enable it to become a fully brand-and-technology-independent Company for its core Decorative Paints business," the statement added

The execution of these transactions remains subject to the approval of the shareholders of Akzo Nobel India Limited and approval of the Supervisory Board of Akzo Nobel N.V. Akzo Nobel India Ltd. will seek its shareholders’ approval in the coming weeks, with the voting process expected to conclude one month later.

Operated by AkzoNobel India, Dulux has a significant legacy in the country, of nearly 70 years. In a competitive landscape dominated by Asian Paints, Berger Paints and Grasim, Dulux operates with a strong premium positioning. Dulux holds a market share of around 5 percent in the Indian paint industry, much smaller than what leaders like Asian Paints and Berger Paints boast. However, it maintains a strong presence in the premium segment of the market and is renowned for its higher-end decorative paints, including emulsions, glosses and wall coating.