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(Bloomberg) — JSW Group agreed to buy up to 75% of Akzo Nobel NV’s Indian business as the Indian conglomerate seeks to expand its presence in areas such as paints.
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The deal is valued at about €1.4 billion ($1.6 billion) including debt, according to a statement on Friday. The transaction, which is expected to close in the fourth quarter, will generate about €900 million in net cash proceeds for the Amsterdam-based company.
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JSW Paints will buy up to 74.76% stake in Akzo Nobel India Ltd. from the Dutch parent and its affiliates for as much as 89.9 billion rupees ($1.1 billion).
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JSW will need to make an open offer for Akzo Nobel India, according to the statement. The maker of Dulux paints had seen its shares drop about 11% this year through Thursday, valuing it at about $1.7 billion. The stock rose as much as 7.8% to 3,436.90 rupees after the announcement, which is a slight premium to the open offer price of 3,417.77 rupees per share.
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JSW Group has a presence in sectors including steel, energy, infrastructure, cement, paints, defense, mobility and sports, according to its website. It employs nearly 40,000 people across India, the US, Europe and Africa.
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The sale follows a strategic review from Akzo Nobel of its Indian business. JSW Paints Ltd. was vying with Pidilite Industries Ltd. and Indigo Paints Ltd. to acquire Akzo Nobel’s Indian consumer paints business and had entered into a second round of discussions in February, Mint reported at the time.
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Akzo Nobel had a 7.4% share of India’s paints market at a time when competition is gathering momentum. The market saw Indian billionaire Kumar Mangalam Birla make his foray into the sector in 2024 — a year that saw leader Asian Paints Ltd.’s shares plunge a record 32.2%.
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The paint sector in India is witnessing a period of “hyper competition,” Morgan Stanley analysts wrote in a note this month. The industry has been facing challenging demand, though Asian Paints in May said it expects urban areas to improve.
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Akzo Nobel India had earlier this year authorized the management to evaluate potential deals including the sale of its powder coatings business and a research center to the parent, to make it a more focused liquid paints and coatings business.
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—With assistance from Anirban Nag and Satviki Sanjay.
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(Updates with more details from seventh paragraph.)
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