Race for AkzoNobel India: JSW Paints likely to have emerged as front-runner

Pidilite Industries, a consortium of private equity major Advent International and Indigo Paints are the other key suitors

JSW Paints, a group company of diversified conglomerate JSW Group, is likely to have emerged as the front-runner to acquire the majority stake held by Dulux paint maker AkzoNobel India's Dutch parent, four persons in the know told Moneycontrol.

A final decision in the ongoing hotly contested sale process is yet to be taken by Amsterdam, Netherlands-headquartered Akzo Nobel N.V, these persons said, adding that a consortium of private equity major Advent International and Indigo Paints is the other key suitor in the final leg.

Fevicol maker Pidilite Industries had also been named as a bidder earlier, according to reports.

"Post the recent submission of binding bids, JSW Paints is now seen as the lead contender for the proposed deal, but no final call has been taken yet," of the persons above said.

A second person familiar with ongoing discussions said, "This is a big cheque. JSW Paints was in talks with private equity firms earlier and in recent days has also held discussions with a clutch of global debt & credit funds for funding support for the proposed buyout, "one of the persons above said.

Two other persons confirmed the above and one of them added that investment bank Citi is the sell-side advisor on the deal.

All the four persons above spoke on the condition of anonymity.

Dutch firm AkzoNobel NV holds a 74.76 percent stake in AkzoNobel India and any attempt at purchasing a controlling stake will trigger an open offer. Based on the market cap of the Indian arm at the end of day's trade on May 15, the parent's stake is valued at around Rs 11,854 crore.

In response to an email query from Moneycontrol, a JSW Group spokesperson said, "No comments." Both AkzoNobel NV and AkzoNobel India said in an email response, "We do not comment on market rumours."

Emails sent to Indigo Paints were left unanswered at the time of publishing this article. Citi and Advent International couldn't be reached for an immediate comment.

The local business of AkzoNobel includes the decorative paints segment as well as the industrial paints segment and the firm's stock price has rallied by 35.79 per cent in the last year.

Following are the results of AkzoNobel India for financial year 2024-25 (compared with financial year 2023-24) - revenue from operations stood at Rs 4,091.2 crore, up by 3 per cent , EBIT from operations flat at Rs 551.8 crore; double digit profitability sustained at 13.5 per cent and PAT flat at Rs 428.6 crore.

“Committed to enhancing value for its shareholders, The Board of Akzo Nobel India has proposed a final dividend of Rs 30/- per share subject to shareholders’ approval, taking the recommended total dividend for the financial year 2024-25 to Rs 100/- per share”, said Rajiv Rajgopal, Chairman and MD of the firm post a board meeting on May 14.

According to its website, the environment -friendly JSW Paints has two manufacturing units, an industrial coatings facility at Vasind in Maharashtra and a decorative paints facility at Vijayanagar in Karnataka with a combined capacity of 170,000 KL per annum. Within a short span of time, it has already become the largest industrial coil coatings company in India, the website added.

On May 14, Moneycontrol reported that JSW Infrastructure promoter group entity Sajjan Jindal Family Trust (through its trustees Sajjan Jindal and Sangita Jindal) is planning to sell certain equity shares of the firm to comply with market regulator SEBI's minimum public shareholding (MPS) norms, according to a recent disclosure by the port operator and logistics player.

The JSW Group, in addition to paints also has other business interests in sectors such as steel, energy, maritime infrastructure, defence, B2B e-commerce, realty, cement, sports and venture capital.

The Akzo Nobel strategy

In October 2024, Akzo Nobel NV announced that with an initial focus on its decorative paints positions in South Asia, it is conducting a strategic review of its portfolio in order to redeploy capital towards growing its core coatings businesses.

As per an exchange disclosure earlier in January, it was announced that Akzo Nobel India will start exploring the potential sale of its powder coatings business as well as the R&D operations to a separate, indirect wholly-owned arm - Akzo Nobel NV, as requested by parent entity.

The board of Akzo Nobel India also informed that it has been asked to start the process of potential acquisition of intellectual properties under the decorative paints business that are currently owned by Akzo Nobel NV.