Major Paint Companies Vie for Akzo Nobel India in ₹13,107-Crore Deal

Top paint companies including Pidilite Industries, JSW Paints, Berger Paints, and Indigo Paints have developed an interest in buying Akzo Nobel India which is valued at ₹13,107 crores. Its parent company Akzo Nobel NV owns the Dulux Paints brand and has just decided to withdraw itself from the Indian market, after which the country’s industry majors began their aggressive bids to fill the gap created in the growing ₹74,000-crore Indian paints market.

The strategic decision comes as the Indian paint industry witnesses heightened consolidation, especially after the Aditya Birla Group entered the sector last year

Akzo Nobel NV, which holds a 74.76% stake in its Indian subsidiary, mandated Citi to explore options, ultimately opting for a full sale of its Indian operations.

According to sources, the bidding companies have submitted non-binding offers and will engage in management meetings with Akzo Nobel NV in the Netherlands next week. This high-stakes acquisition would require the successful bidder to make an open offer for an additional 26% of Akzo Nobel India, making it one of the largest takeovers in the segment.

Akzo Nobel India, with a 7% market share, reported a profit after tax of ₹97.9 crore for the September quarter, a 4% year-on-year increase, alongside revenue of ₹982.30 crore.. Despite challenges like rising raw material costs, the company remains one of the most profitable in the sector, boasting an annual production capacity of 250 million liters.

Pidilite Industries, known for its adhesive products, sees the acquisition as a significant opportunity

“We are constantly exploring partnerships and acquisitions,” said Sudhanshu Vats, Pidilite’s MD-designate.

Similarly, JSW Paints’ MD Parth Jindal expressed his company’s “serious interest” and is exploring private equity partnerships to bolster its bid. Indigo Paints is reportedly in talks with Bain Capital, though its MD, Hemant Jalan, declined to comment.

Analysts predict further consolidation in the paints industry, driven by rising consumption and the untapped potential for branded players. “Akzo Nobel India fits into the long-term consumption theme,” said Naveen Trivedi of Motilal Oswal Financial Services, emphasizing the sector’s significant growth prospects.

This acquisition could redefine the competitive landscape of India’s dynamic paint market.