Stylam Industries shares fall 5% as Japan's AICA Kogyo set to acquire 40% stake for Rs 1,525 crore

Stylam Industries share price

• Aica Kogyo to buy 40.53% stake in Stylam Industries for Rs 1,525 crore
• Stylam shares fell nearly 5 percent after the stake sale announcement
• Aica Kogyo will nominate up to 8 directors to Stylam's board after the deal

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Stylam Industries on December 26 announced that Japan’s AICA Kogyo will buy 40 percent stake in the company for Rs 1,525 crore.

The shares of the company fell 5 percent to trade at Rs 2,185 apiece after the announcement in the afternoon trade.

The stake acquisition will be done by the Japanese conglomerate in various tranches. Stylam’s promoters Pushpa Gupta, Dipti Gupta and Manav Gupta have entered into a share purchase agreement with the company to sell around 45.97 lakh shares, representing 27.12 percent stake, in two tranches.

Jagdish Gupta, Saru Gupta and Nidhi Gupta meanwhile have entered into a share purchase agreement with AICA Kogyo to sell up to 21.82 shares, representing 12.88 percent stake in the company, in two tranches at a price of Rs 2,250 per share.

The price of the transactions has been set at Rs 2,250 per share. This makes the total value of the transaction stand at Rs 1,525 crore for 6,779 crore shares (40 percent stake).

These stake acquisitions will be followed by an open offer to public shareholders. The open offer price marks a 2 percent discount from the previous closing price of Rs 2,300.50 apiece.

The parties also entered into a shareholders’ agreement regarding the overall supervision of the board after the stake transfer. The board will comprise a maximum of 15 directors, with Aica Kogyo Company being able to nominate up to 8 directors, each of whom shall be either executive or non-executive (non-independent) director and recommend one independent director to the board, in the manner set out in the SHA.

AICA Kogyo is Japan's leading manufacturer of chemical and building material products including high-pressure laminates, adhesives, coatings, and construction materials. The company has manufacturing bases across Asia and North America. Its India presence dates back to 2011 through AICA Laminates India Pvt. Ltd., which manufactures and markets decorative laminates under the ‘Sunmica’ and ‘AICA’ brands.

Haryana-based Stylam Industries is one of India’s largest exporters of decorative laminates and surfacing products. The company manufactures high-pressure laminates, exterior cladding, and other architectural materials under the ‘Stylam’ brand, with a significant presence in Europe, Asia, and West Asia.

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