Race for Akzo Nobel's India business heats up as Blackstone, other PE firms join race

The race to acquire the India business of Dutch multinational paint company Akzo Nobel NV has intensified further with the entry of global investment firm Blackstone.

The race to acquire the India business of Dutch multinational paint company Akzo Nobel NV has intensified further with the entry of global investment firm Blackstone, according to industry sources.

Besides Blackstone, three other US-based private equity (PE) funds have shown interest in acquiring a controlling stake in the Akzo Nobel India business, in which rival paint makers such as JSW Paints and Pidilite Industries are already in the fray.

The PE funds, which include Blackstone, Warburg Pincus, global investment firm Carlyle Group, and Jersey-based CVC Capital Partners, are not only looking at the India business of Akzo Nobel, which operates in the decorative paint segment with brand 'Dulux' but also for its entire South Asia business.

Akzo Nobel's South Asia business includes India and neighbouring markets such as Pakistan, Nepal, and Sri Lanka.

Some of the big names such as Aditya Birla Group's Birla Opus and Berger Paints have opted out of the race to acquire Akzo Nobel's India paint business.

Moreover, Asian Paints, which dominates the Indian Paints industry with majority market share, is also reluctant as it may face regulatory hurdles from fair trade regulator CCI, the sources said.

JSW Paints, part of Sajjan Jindal-led diversified conglomerate JSW Group is in a race in association with PE firm TPG to acquire the majority stake from the parent Dutch firm.

Besides Pidilite -- a new player in the Indian paints industry -- Pune-based Indigo Paints are also believed to be in the race to acquire a 74.76 per cent stake held by Akzo Nobel in its India business through several entities.

An e-mail to Akzo Nobel India remained unanswered till the time of filing of the story.

In October last year, Akzo Nobel NV announced a strategic review of its portfolio in South Asia and said it was looking for strategic options, including partnerships, joint ventures, mergers or divestments. This is to deploy capital towards expanding its core coatings business.

Akzo paints and coatings maker Akzo Nobel India, in a regulatory filing on January 6, said it is exploring the sale of its powder coatings business and R&D operations to a separate indirect wholly owned arm, Akzo Nobel NV, following a request by the parent firm.

Besides, Akzo Nobel India has asked to explore the potential acquisition of decorative paints intellectual properties owned by ANNV, the company added.

"The Board of Directors of the company, at its meeting held on January 6, 2025, took note of the above said and authorised the company's management to commence exploratory steps as may be required to evaluate and examine the aforesaid potential transactions," the filing said.

Akzo Nobel India has a presence in a wide range of paints and coatings segments spanning from decorative paints, automotive and speciality coatings, industrial coatings, marine, protective and yacht coatings to powder coatings.

Its revenue from operations in FY24 was Rs 3,961.6 crore.

In its latest annual report, Akzo Nobel India, citing the data of the Indian Paints Association, said the paints and coatings industry in the country is estimated to be USD 8.5 billion in value and 6.3 million MTPA by volume.

The architectural sector accounts for nearly 70 per cent of the paint industry, and is the largest segment, while the industrial segment accounts for 30 per cent of the total consumption.